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Tuesday, September 7, 2010 |
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Free childcare funding not sustainable finds market report |
by www.cypnow.co.uk - added 22/04/2009 |
Government arrangements to help nurseries offer free childcare will lead to "heavy casualties" among providers, according to a market report.
Market intelligence providers Laing and Buisson, in the Children's Nurseries Market Report 2009, state that 62 per cent of nurseries feel funding for delivering free childcare to three- and four-year-olds does not cover costs. This figure is almost unchanged from 2008, (61.5 per cent) despite authorities completing a cost analysis of the free entitlement in the past year.
Purnima Tanuku, chief executive of the National Day Nurseries Association, said: "We are disappointed that the cost analysis process does not seem to have increased funding to a more sustainable level, and believe this is partly because local authorities still struggle in ensuring enough funding is reaching nurseries."
According to Laing and Buisson, the average level of hourly funding for the free entitlement has gone from £3.30 to £3.41 since 2008, an increase of 11 pence. However, this is only in line with inflation and makes no difference to the loss-making position of nurseries.
Reforms to government funding are ongoing, including better representation from private, voluntary and independent providers; more accurate occupancy measures; and a single funding formula to ensure fair access across maintained and private, voluntary and independent (PVI) settings.
But Philip Blackburn, senior economist at Laing and Buisson and the report's author, wrote that even with the single funding formula, due to be implemented in every authority by April 2010, the nursery sector will require an extra cash injection from the government to stay sustainable.
"When the majority of nurseries responding to our survey continue to tell us the early years entitlement doesn't cover their costs, it is clear that this current funding arrangement cannot be sustained going forward without some heavy casualties," he said.
Blackburn added that the current economic climate has exacerbated the problem, as 38.5 per cent of nurseries reported a drop in business and 53.5 per cent said they expect things to get worse.
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