Underlying data from the Survey of Childcare and Early Years Providers 2019 shows that in 2019, the average annual cost of delivering childcare for private and voluntary group based providers was £240,333. This marks a 20 per cent increase on the previous year’s average annual cost of £199,708.
In comparison, the increase in local authority early years funding for 2020/21 recently announced by the DfE will only amount to up to 2 per cent – and even these small increases may not be fully passed on from councils to childcare providers.The statistics also reveal that staff wages account for the highest proportion of childcare delivery costs for nurseries and pre-schools (73 per cent), following by rents and mortgages (10 per cent), and food costs (4 per cent).
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Neil Leitch, chief executive of the Early Years Alliance, branded the recently-announced increase in early years funding truly as ‘woefully inadequate’ in the light of these latest findings.
‘With ongoing increases in the national living and minimum wages, the cost of running a childcare business has increased hugely over recent years, and yet government investment into the sector has completely failed to keep up,’ he said.
‘With plans to both increase statutory wage requirements and expand so-called “free childcare” offers being mooted by various political parties, it’s clear that, whoever is successful at next month’s general election, a significant increase in childcare funding will be needed if the early years is to remain viable and sustainable.
‘We urge every political party to include a commitment to ensure adequate investment into the sector in their election manifesto. With the sector already facing a funding shortfall of £662m, and hundreds of providers month, we cannot allow the current situation to continue.’