Wigan bucks national trend as childcare costs fall

But the Professional Association for Childcare and Early Years warns providers across the country are struggling to stay afloat, thanks to rising costs and insufficient funding for the Government’s 30 hours’ free childcare scheme.

The average hourly fee charged by childcare providers for three and four year olds in Wigan was £4.25 in 2019, according to a survey carried out by the Department for Education.

That was a decrease compared to the previous year, when it was £4.75.

Localised figures are rounded to the nearest 25p, meaning the true change could be as low as 26p or as high as 64p per hour.

Across England, however, parents saw an average hike of 2.4 per cent, rising to £5.04 per hour.

Families with both parents in work – or just one in single-parent households – who earn at least 16 hours minimum wage per week but less than £100,000 a year are entitled to 30 hours’ free childcare weekly during term time.

But industry experts argue funding for the scheme does not cover providers’ costs, pushing up the cost of childcare outside the funded hours.

PACEY says some smaller providers are being forced to shut up shop or join larger chains, leading to what it described as the “Tesco-isation” of childcare, and less choice for parents.

In Wigan, the number of Early Years childcare providers – those who care for children from birth up until five – registered with Ofsted fell from 348 in 2015 to 272 last year, a decrease of 22 per cent.

Over the same period, the number of providers nationally dropped from 73,500 to 61,700, which is a 16 per cent decline.

Liz Bayram, chief executive of PACEY, said the current system was “untenable”, and called for the Government to readdress its funding formula.

“The situation has been in this mess for far too long and this government needs to take action now,” she said.

“We believe all of [the challenges] can be resolved if this government revisits its funding formula for early education entitlements so that it covers the current cost of delivering a place, and in future is linked to inflation.”

A Freedom of Information request found three-quarters of councils underspent on early years education in 2018-19, with £63.5m earmarked for pre-schoolers either unused or channelled away to other education areas.

Wigan Council reported a £681,000 underspend during that time. The council currently receives £4.30 in government funding per hour per child, according to NDNA.

Of this, £4.04 (94 per cent) goes to providers as a base rate to fund the provision of free places. Additional hourly supplements provided by the council based on levels of deprivation or special educational needs have not been factored in.