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​England: Childcare costs to skyrocket, charity warns

Childcare costs will increase significantly if the government goes ahead with plans to freeze early years funding rates until 2019/2020, a charity has warned.

The Pre-School Learning Alliance obtained figures showing 75% of local authorities have failed to keep pace with inflation across the UK over the past five years, while more than one in five had frozen or even cut the amount.

However, during this period, childcare costs rose on average 4.6% a year.

Currently, three and four year olds are entitled to 15 hours of free childcare a week but under the conservative pledge, this will change to 30 hours a week from September 2017.

Providers previously said the move could force them out of business unless the funding matches the actual cost of providing the service.

Alternatively, they would have to increase the rates they charge for “extra” hours of childcare.

The Department for Education (DfE) raised hourly rates it pays to local authorities to spend on childcare settings, however, not all areas are getting the raise, the charity said.

Neil Litch, chief executive of the Pre-School Learning Alliance, said: "The government has tried to sell next year's funding changes as a solution to all the concerns about the 30 hours offer, but this simply isn't true.

"With a quarter of all local councils seeing a fall in funding next year, childcare costs in those areas are likely to sky-rocket as childcare providers face a choice between either raising fees or going out of business."

The DfE said it was investing a record £6 billion a year in childcare by the end of the current parliament.

A spokesman said: "As a result of our proposed changes - including allocating funding more fairly across the country and a requirement for local authorities to pass on 95% of funding to the frontline - the vast majority of providers can expect to see their funding increase."

Posted on: 29/09/2016

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