David Cameron public stated in 2015, just before the public election that his party, the Conservatives, would double the availability of free childcare for those of a preschool age. He stated that a family would be entitled to 20 hours a week in England. This meant that many parents were set to save as much as £5000 on such fees over a year.
Very soon, the policy will be put into place. However a leading authority named the Pre-school Learning Alliance has said that the term ‘free childcare’ is ambiguous and parents should be cautious in forecasting their actual savings. Here we take a look at what this new policy could actually mean for you.
What is the policy?
The scheme covers parents in England who earn less than £100,000 a year each, with education policies in Scotland and Wales devised separately. Parents on lower wages with children aged two may also qualify.
So I won’t be charged at all?
Not exactly. First, the government’s funding for nurseries covers only 38 weeks of the year (school term time), which means the policy doesn’t extend to the full 52 weeks, and you’ll have to pay for the rest.
Second — and crucially — the government isn’t funding all of your nursery’s services. Its extra stipend for the “free” hours covers care and education costs, but not any additional services provided.
This means that lunch, snacks and any outings or additional costs are met by the nursery, and it is allowed to pass those on to you. The degree to which it does varies hugely between companies.
What extras can I still expect to pay for?
It varies from nursery to nursery. Some have complained that the government’s funding is insufficient to meet their costs for 30 hours, so they are raising charges for parents in a variety of ways. A survey of nearly 1,400 childcare providers offering the “free” hours found that 49 per cent of nurseries plan to raise the charges for additional hours of childcare not covered by the government’s pledge, and 52 per cent are increasing fees for snacks and trips.
Ominously, 38 per cent say that, despite these rises, they still didn’t think their businesses would be sustainable within a year. In short? You’re likely to end up with a hotch-potch of additional charges and you should check carefully with your nursery or pre-school.
OK, the hours aren’t free, but how much will I save?
This depends on your area and what your nursery decides to do, but an analysis by the Yorkshire Building Society this week suggests that parents will save an average of £211.38 a month. This is based on the average national hourly care cost of £4.45 a child.
Why are some nurseries not offering the 30 hours?
It’s not compulsory for nurseries to offer the full quota of free hours. The Pre-School Learning Alliance believes that about two thirds are offering the scheme, while the government says it is eight out of ten. The vast majority are offering the old provision of 15 hours. If you’re in full-time employment, make sure you find out if you’re eligible for childcare vouchers from your work because they allow you to pay for childcare from your salary, before tax.
What does the government say?
Ministers this week described the scheme as a landmark offer to parents and reiterated Mr Cameron’s 2015 claim that families should save about £5,000 a year and estimates that 390,000 working families will benefit. It says 15,000 families have already used the scheme in the 12 areas where it was tested.
“For too long lots of families really struggled to manage the cost of childcare, and that’s why we have delivered on our promise to provide 30 hours free,” Justine Greening, the education secretary, says.
Neil Leitch, the chief executive of the Pre-school Learning Alliance, says: “There’s no such thing as free childcare. For years, government funding simply hasn’t covered the cost of delivering early-years care, with childcare providers and parents forced to make up the shortfall — and with the launch of the 30-hour offer, things are only going to get worse.
“The government should be honest that what it’s offering is funded, or subsidised, childcare, and nothing more. Describing the offer as free might make good politics, but it’s going to lead to a lot of confused and disappointed parents over the next few weeks and months.”
For many people, these ever changing policies are confusing and hard to keep track of. It really pays to be clued up and assess exactly where you can save money. If you would like advice on exactly what this new policy might mean for you then do get in touch with us. We can offer help to individual cases to help to try and understand the complexities of the policy.