Childcare: Expansion of free nursery places needs more funding

File image showing a young girl playing with coloured blocks on the floor

By Liz Jackson

BBC News

A London Assembly committee is urging the government for more childcare provider funding in London when it expands its free childcare provision.

From April, free childcare for children under three will be offered in England.

But a report by the economy committee has said the funding for nurseries offering free places "does not cover the cost of delivery in London".

The Department for Education (DfE) has said funding rates "reflect" varying costs around the country.

The committee added that the lack of funding would affect "the cost, quality and availability of childcare for parents and families".

Applications open for new free childcare scheme

'Severe staffing shortages'

As part of its work the committee also surveyed about 100 parents in the capital.

The research suggests London has the highest childcare costs in the country, with 25 hours of childcare for under twos costing 25-33% more in London than the average for the rest of Britain.

Nursery workers play with children sat around a table

The report highlighted "clear concerns" about capacity amid extra demand for childcare caused in part by the expansion of free places.

"The expansion needs to be properly funded and implemented with input from the sector to ensure it has the capacity to address the resulting increase in demand," the committee's report said.

Another contributing factor is the soaring cost of living in the capital, which is triggering "severe staffing shortages" and "ongoing challenges related to recruitment and retention", the report said.

It added: "Research has shown that workers in the sector feel undervalued, while wages and the lack of career progression also act as a barrier to recruitment and retention."

File image showing a young child drawing on paper next to wooden people and a stacking rainbow arch

As well as calling on the government to improve funding rates for London providers, the committee recommended London's mayor and deputy mayor for children and families to carry out a London-wide review of the sector to understand the challenges related to the expansion.

It also suggested they "investigate barriers to childminders working from private and social rented accommodation" and work with social and private landlords to ensure they are taking steps to allow tenants to set up as childminders in their homes.

'Confident in childcare market'

A spokesperson for the mayor said: "The huge challenges that parents face to find spaces are only set to get worse if ministers fail to address the significant issues facing the sector.

"The mayor is committed to doing all he can to build a fairer and better London for all, and will consider the committee's report and respond in due course."

A DfE spokesperson said: "We are confident in the strength of our childcare market to deliver the largest ever expansion in childcare in England's history and have increased the hourly funding rates with a £204m cash boost this year and over £400m next year.

"The rates reflect extensive data gathering on the costs early years providers face and how they vary across the country."