Officials knew free childcare could push up nursery fees

THE Government knew nursery fees could rise as a result of its flagship free childcare policy, official documents reveal.

Documents obtained from the Department for Education (DFE) under Freedom of Information laws state that officials recognised introducing 30 hours of free childcare for three and four-year-olds in England was likely to result in price increases for parents.

The documents, released by the Early Years Alliance (EYA) after the Government was forced to publish them by the Information Commissioner, suggest that early years funding rates for 202021 were less than two-thirds of what DFE estimated to be the true cost of “fully funding” the sector.

Neil Leitch, chief executive of the EYA, will accuse the Government of “shamelessly, knowingly underfunding” the sector during his keynote speech at the organisation’s annual conference on Thursday.

A briefing document to the ministers, titled Early Years Spending Review Scenarios and dated Oct 27 2015, said: “Provider costs vary substantially between age groups – primarily because of statutory ratios. Providers generally adopt a more-or-less flat pricing structure across the age phases.

“Currently this is possible because the free entitlement is only 15 hours. When [the Government] purchases the majority of ‘cheaper’ three and fouryear-old places, it will become harder for providers to price in this way.

“Providers may, therefore, increase prices for younger children.”

It adds: “There are a number of factors that could risk the sustainability of the [three and four-year-old] entitlement… Fully funding them all is not affordable – by 2020-21 it would be a three to fouryear-old rate of £7.49, and potential cost for the uplift alone of over £2bn.”

Mr Leitch said: “These documents prove… [the Government] knew that the introduction of the 30-hours policy, along with an insufficient level of investment, would result in higher costs for parents of younger children.”

A DFE spokesman said: “We’ve made an unprecedented investment in childcare over the past decade, spending more than £3.5billion in each of the past three years on our free childcare offers.”