29th September 2018 Insights News & Trends

Childcare Finance and Sustainability in 2018

We’re proud to have supported Ceeda with their latest About Early Years Annual Report and bring you the highlights of their findings on finance & sustainability in the childcare sector.

The cost of childcare delivery in 2018

The report confirms that the average cost of delivering one hour of childcare for 3 – 4 year olds is now £5.08, for 2 year olds it’s £6.90 and for under 2’s it’s now £7.44 per hour.

The funding shortfall

The new average cost of childcare helps to highlight a large shortfall in government funding levels. The average funding rate paid to PVI providers for 2 year olds is £5.23. The average cost of delivery for 2 year olds is £6.90, which is 32% higher! This highlights a huge funding gap of £1.67 per child per hour.

The average funding rate for 3 & 4 year olds is £4.34; a variance of 17% from the average cost of delivery.

The report estimates that childcare providers delivering places for 2 – 4 year olds face a funding deficit of £387 million in 2018/2019. When taking into account the mix of age and attendance at each setting, the estimated funding deficit rises to £616.5 million.

These shocking numbers suggest that we may continue to see closures and struggles for smaller settings and those in the most deprived areas.

We cannot incite change without providing substantial evidence with robust research and accurate data. With their annual report, About Early Years are leading the way in providing the proof needed to back up the claims of the early years sector, and we will give them our continued support.

 

For a full analysis of finance and stability in the sector at the moment, including LA pass-through rates, the difference in cost for different age ranges and insight into how the Dfe calculates adjustments, download the full free report here.

 

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Connect Childcare have been developing purpose built nursery management software for the past 12 years. Their missions is: To develop management software that improves the lives of children, globally.