Members were asking about the rate for funded childcare places, realising that the uplift in staffing costs was going to increase pressure on their business model. Following these conversations Early Years Wales surveyed members to hear the views of a wider range of providers across Wales.
The papers, which can be accessed below, convey a worrying perception; that the static funding rate is going to result in providers making losses that are unsustainable. Early Years Wales continues to raise this issue with policy colleagues in the Welsh Government, and our Chief Executive Officer has met with four Members of the Senedd through meetings and appointments to share the concerns expressed by our members.
We are publishing the full report today and calling for the review of the rate to commence as soon as possible, the mechanisms for future reviews to be explored and more frequent than 3-yearly, and any interim measures to support the sector considered in response to the sector concern. Early Years Wales will continue to work proactively with decision makers and stakeholders to consider all avenues to increase the sustainability of the childcare sector in Wales.
We acknowledge that the uplift in Living Wage rates is required to support staff, and aspire to see a funding rate that is more realistic and in line with costs for providing the childcare places. Despite pressures on the public sector funding, we do not think the current model is providing sufficient financial support to sustain the level of staffing and quality of childcare we need in Wales and our members data reflects their views on the impact of this deficit.
Headline figures show:
- 84% of members disagree that the uplift in minimum wages is affordable based on the current funding models and other cost pressures.
- 91% are considering or will increase parental fees.
- 94% do not think the funded rate covers the costs of providing childcare places.
- Almost all providers think the rate should be reviewed annually or moved in-line with inflation through some mechanism.
- 72% have confidence they can sustain the current model for 1 year, 20.2% for 2 years, and only 8.8% for the next five years.
- Most providers indicate funding rates of between £6-£8 (the range is from £5/hr - £10/hr) are more appropriate than the current £5/hour
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 Impact of the 2024 uplift in National Living Wage Report | 307.54 KB |
November and December 2023