Free childcare that's proving unaffordable

The old adage states: 'a child's education begins at home', but today we can reveal that many parents are being left with little choice but to keep their offspring away from nursery school due to rising prices.

Nurseries, children's centres, childminders and playgroups say they are struggling to stay afloat having been left out-of-pocket byGovernment schemes to offer free childcare.

All three and four-year-olds in England are entitled to 570 hours of free early education or childcare a year, which is often taken as 15 hours each week for 38 weeks. Some two-year-olds with parents on benefits or low wages are also eligible.

The free places scheme was first introduced in the late 1990s and expanded in the mid-2000s to cover different age groups, but the grant funding has never kept pace with inflation.

This cash available can vary dramatically from one area to another. Birmingham and Worcestershire both pay more than £6 per child under the free places scheme, far more than Dudley, Wolverhampton and Walsall.

And providers in some areas say the money they receive can be up to 50 per cent less than the cost of looking after children in real terms.

Debbi Gould runs First Steps Children's Nursery in Compton Road, Wolverhampton, as well as three others in Birmingham.

She said the lack of funding available in Wolverhampton has left many nurseries fighting a battle to stay afloat .

"There is a big shortfall," she said. "In Wolverhampton we get £3.32 per hour, per child for every three year old. My hourly rate is £4.50, so we are already losing money. The actual cost of looking after a child is far higher than that, probably double.

"In Birmingham we are getting a much higher amount from the council.

"For private providers like us there's a balance in terms of offering high quality provision and making enough money to run the business.

"A lot of settings are non-profit organisations that don't even meet their costs. It is little wonder that some of them go out of business."

First Steps in Wolverhampton is one of the few Ofsted 'outstanding' rated providers in the city, a fact that Mrs Gould says could account for the low number of parents taking up childcare options.

"Since we were rated as outstanding we have had no problem filling places," she said. "Parents look for quality and if they can't get it they may decide to keep their youngsters at home."

The Lords Committee on Affordable Childcare said this week that funds distributed by local authorities do not cover the economic cost of delivering the free hours, particularly in the private, voluntary and independent settings.

Andrina Flinders, deputy head of Fullbrook Nursery School in Walsall, a 142-pupil local authority-run nursery that is rated 'outstanding' by Ofsted.

She said the funding gap has an impact on the resources providers can offer.

"It definitely affects the resources that providers have at their disposal," she said. "Nursery schools in Birmingham, for example, can use the extra money to employ more teachers and provide better equipment.

"Because we are run by the council we don't have to make a profit, but things would be easier if more funding was available."

In Sandwell the funding is higher, with nurseries getting around £5 per hour for each two-year-old.

Claire Rabger, manager at Sadwica in West Bromwich said: "We charge a sessional rate of £26 for five hours, so the funding we get is not too bad."

But she added some parents had told her they could no longer afford to send their children to nursery. "We operate in a deprived area and our prices are quite reasonable.

"But a few working parents have said they can't afford the fees anymore."

Average prices in the West Midlands are £112.77 per week for a 25 hour part-time nursery place for a child under two.

Childminders in the region average £3.80 per hour, after school clubs £43.18 per week and holiday clubs £108 per week.

But cost is only one factor when it comes to parents keeping their children away from childcare providers.

In Dudley the take up for free early education places is one of the lowest in the country, with only 35 per cent of the 1,754 two year olds eligible taking up the offer.

The national average is 60 per cent.

Councillor Tim Crumpton, Dudley Council's cabinet member for children's services, put the low take up down to cultural differences as well as financial constraints.

He said: "In Dudley we still have a lot of large extended families that are not used to farming their children out for someone else to look after. Many working parents are more likely to turn to family members to look after children rather than send them to nursery.

"There's also financial issues for providers. They have to make a living and with the current funding arrangements that is extremely hard."

Mr Crumpton said the authority has consulted with the DfE over alternate ways it could use the free childcare allocation.

"We are looking at different ways to use the hours that we haven't previously considered," he added. "We want to do more to help increase the numbers of youngsters that take up the offer of free places. "This involves working with parents and providers to come up with a solution."

Although nursery prices in the borough are said to be similar to the regional average, childminders are 10-20 per cent more expensive.