Lancashire childcare staff 'better off at Tesco', because of low funding rates, nursery operator says

Childcare and nursery staff in Lancashire could earn more “stacking shelves in Tesco than helping to educate children”.

By Paul Faulkner
Tuesday, 23rd February 2021, 6:31 pm
Updated Tuesday, 23rd February 2021, 9:09 pm

That was the damning assessment from a senior figure in the county’s pre-school sector, who said that early years provision needs to be “pushed up the agenda” at a national level.

Peter Hindle, who chairs the early years block of the Lancashire schools forum, said that the county’s 2,200 private and voluntary operators were facing a “quadruple whammy of chronic underfunding, increasing child needs, recruitment challenges and Covid”.

He was speaking at a recent meeting of Lancashire County’s Council’s education scrutiny committee, which heard that the local authority remains one of those with the lowest hourly rate for government-funded childcare entitlements.

Lancashire's early years providers receive the joint-lowest hourly rate for funding free childcare entitlements in the country

The county currently receives £5.36 an hour for two-year-olds, 1.8 percent below the national average, and £4.44 for three and four-year-olds, five percent less than the average for the rest of England. That puts Lancashire on the “minimum funding floor”, along with 44 percent of other council areas.

The county’s schools forum last month agreed to transfer £2m of financial “headroom” from the general schools fund to the early years sector - but even that improves the three and four-year old rate by just two percent and is also only a one-off boost to the budget.

Mr. Hindle, who has run his own nursery in Burnley for more than 30 years, said that providers had risen to the challenge of dealing with Covid - but warned that they had done so against the backdrop of existing financial struggles, which meant that 15 percent of them were in a “financially perilous” state.

“I’m saddened when I hear stories of struggling [operators] where owners have sacrificed their salary and gone into debt - they do it for the children.

“One said: ‘I'm lucky my husband has got a good job, so he buys resources and I don't need to get paid’. Another said that, as a childminder [they] had to get a second job to survive.

“Staff can earn more stacking shelves in Tesco than helping to educate children.

“I’m saddened that our [early years] workforce are on or just above minimum wage and 45 percent of them are on state benefits or tax credits - is this how we want to treat employees in a vital education sector?” Mr. Hindle asked.

Committee members heard that funding for special needs places in pre-school settings was putting providers under particular pressure.

The disability access fund pays £615 per year to outlets for each child with additional needs to whom they provide a place.

“That works out at £12 per week - [which] probably wouldn't buy you even an hour of one-to-one support to assist you with that child,” explained County Hall’s interim head of early years, Andrew Cadman.

Parents and carers are entitled to 15 hours per week of free childcare for two-year-olds, if they receive a qualifying benefit, while all families can obtain 15 hours free for three and four-year-olds - a total which is doubled for working families who meet earnings eligibility criteria.

In the county council area, which excludes Blackpool and Blackburn with Darwen, take-up of the offer for older children is high, at just under 93 percent - and rises to 95 percent in the least well-off parts of Lancashire.

However, within the two-year-old cohort, just 70 percent of eligible families make use of their entitlement - and while that is fractionally above the nationally average, the figure falls to 65 percent in the four county council districts that are in the top 20 percent most deprived parts of the country: Burnley, Hyndburn, Pendle and Preston.

The committee was told that could be one of the reasons why Lancashire has lately “stood still” in terms of the proportion of children deemed to have achieved a ‘good level of development’ by the end of their reception year.

The county currently scores just over 69 percent by that measure - but the national average has recently risen to just under 72 percent.

Andrew Cadman suggested that Lancashire needed to be above the national average in the proportion of two-year-olds accessing free childcare entitlements in order also to improve its development score.

“If there is a drop-off in parents of two-year-old children taking up places - and then they don’t take up three and four year old [places either], there will be this impact as they move into education.

“The challenge is that it’s only when you get three, four or five years’ [worth of] data that you really start to get the picture of where the lapse has been,” Mr. Cadman said, adding that government rates might mean providers in deprived areas limited the number of funded places they offered, making it more difficult for families to access them.

Members heard that an action plan to increase take-up of the two-year-old entitlement - which included community outreach events - had been partially derailed by the pandemic, but had now been revised.

It will be coupled with efforts to ensure that the benefits of what Mr. Cadman described as the “high-quality childcare” being provided in Lancashire are not lost during the transition to school. Ninety-eight percent of Lancashire’s childcare and nursery providers are rated as good or outstanding by OFSTED, including in the most deprived areas.

Members were told that in order to improve developmental goals by the age of five, the focus in Lancashire may need to shift to even before a child reaches nursery age.

“If we can do much more from birth to children actually entering the [early years] settings - with our health visitor and health colleagues - then that will give them a better start as they do enter nursery,” said the county council’s executive director of education and children’s services, Edwina Grant.

Andrew Cadman added that it was also important to carry out a "baseline" assessment of a child when they first arrive in a nursery setting.

“Just because someone lives in a certain postcode or their parents drop them off in a certain car, doesn't mean that there is not a need there for that child," he said.

Responding to the issues raised in the meeting, a Department for Education (DfE) spokesperson said: “We have increased the hourly funding rates for all local authorities for the two-year-old entitlement by eight pence an hour and for the vast majority of areas for the three and four-year-old entitlement by six pence an hour, which is higher than the costs nurseries may face from the uplift to the national living wage in April.

“We are funding nurseries as usual and all children are able to attend their early years setting in all parts of England. Where nurseries do see a drop in income from either parent-paid fees or income from the DfE, they are able to use the furlough scheme. We continue to work with the early years sector to understand how they can best be supported to ensure that sufficient safe, appropriate and affordable childcare.”

The minimum funding floor for childcare places has increased by 14 pence per hour since it was introduced in 2017.