­­­The real impact of underfunding in early years

The EYFSP results arrived only weeks before the DfE confirmed the new early years funding rates for 2020-21. Although the figures show that some local authorities will receive an increase of 8p per hour per child, the amount passed on to childcare settings is likely to be much less.

There are severe concerns over the impact this increase will have when taking into account the rise in business costs and the fact that so many providers are already struggling to remain sustainable.

The latest report from the Education Policy Institute (EPI), released this week, reveals more detail on the £662 million funding gap facing the sector this year. It highlights that 38% of providers in deprived areas are making a loss, but settings in affluent neighbourhoods are feeling the effects too, where 23% are in the red.

On the workforce front, sector pay remains uncompetitive, despite an average rise of 4% over the last year. This is enhancing recruitment and retention challenges as well as in-work poverty for childcare staff. Practitioner pay averages £8.74 per hour, compared with average rates of £8.91 for cleaning and bar work, £9.61 in sales roles and £11.86 in administration and secretarial jobs.

The sector is urging politicians to invest more money into the sector as recent data from Ofsted indicated that hundreds of nurseries and childminders are closing, due to the reasons mentioned above.

Neil Leitch, chief executive of the Early Years Alliance (EYA), said: "We have long warned that without adequate funding, many early years providers would be forced to close their doors and these figures sadly confirm that this is exactly what has been happening. To lose well over 500 nurseries, pre-schools and childminders every month is simply not sustainable.”

Chief executive Liz Bayram, from the Professional Association for Childcare and Early Years (PACEY), commented: “If low funding rates, delayed payments and other red tape continue, we risk more providers closing and more struggling to find the funds they need to provide the staff training and support that underpins high quality care for our youngest children.”

Without high quality education during the most important stage of their development, children are being deprived from the best possible start in life, one that will help them keep pace with their peers and set them up for future success.

It is essential, that as a sector, funding is available to create and maintain a highly skilled workforce with the necessary skills, knowledge and understanding to achieve a positive long term impact on children’s later learning, as stated in the Nutbrown Review in 2012.

We know that effective early intervention can tackle these issues, as demonstrated by EPPE, it is therefore vital that sufficient funding is granted to address the crisis and help close the gap.

We await the details from ministers on how funding for free and subsidised nursery places has been calculated, which is expected imminently, after the Information Commissioner ruled in favour of a call from early years providers for the DfE to provide evidence that funding rates are ‘adequate’.

With the upcoming election looming, it is vital that whoever forms the next government address the underfunding in the sector, both now and in the future, so that all children, regardless of their background, have access to the high quality education they so rightly deserve.