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NDNA calls for an urgent cash boost to ensure the government can deliver it’s child care plans

The National Day Nurseries Association (NDNA) has called on the government to inject further cash to support its childcare expansion plans.

The Association notes that government funding for the existing childcare offer is not keeping pace with rising costs, with wage bills up by 14.4% from April compared with a 4.6% rise in funding rates.

Having surveyed 448 private, voluntary and independent nurseries in England and NDNA has discovered that the funding rate rise in April will not even cover hikes in minimum wages for nursery staff. 83% of nurseries reported their costs to been higher than the funding proposed for three and four-year-old places. The average shortfall was a significant £2.36 per hour per child or £1,345 over the year for a 15-hour place.

The survey also found that early years providers were keeping fee increases below their rising costs. The average increase in bills to families was 8.5%, compared with a 14.4% increase in staffing costs. This is largely as a result of statutory minimum wage rises and efforts to retain more qualified and experienced staff. 

As a result, 73% of respondents expected to make a loss or break even this year. The situation in areas of deprivation was worse where 50% expected to make a loss.

Purnima Tanuku OBE, NDNA Chief Executive said: “As part of our annual business survey, we have taken the temperature of the early years sector at this crucial time. We found it needs a boost in the Budget to help providers to be sustainable before they can expand to deliver on the Government’s ambitious promises.

“We have been calling for the Government to address underfunding for years. We can clearly see that increasing hourly rates can have a positive impact with a fall in the numbers of providers saying they cannot cover their costs. However, for the vast majority the hourly rates are still not keeping pace with rising costs.

“The early years sector is creative, committed and adaptable. We know providers and staff will do all they can to give children the best start in life at this crucial stage of development. As part of this, providers are keeping fees well below the increases they are seeing in their staffing costs.”

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Published on 11th March 2024