Creasy: Government childcare plan could ‘crash’ system without adequate funding

Stella Creasy has warned that the government’s expected announcement on expanding free childcare “could end up crashing the childcare system” without adequate funding for the sector.

The Guardian reported on Tuesday that Jeremy Hunt is expected to set out a £4bn plan to expand free childcare in today’s Budget. The government proposes to provide an extra 30 hours a week to parents of one- and two-year olds and increase funding for existing free childcare provision for three year-olds for 2024/25.

Speaking to Sky News this morning, Creasy welcomed the fact that childcare is “now on the political agenda” but expressed concern that the government “could end up crashing the childcare system just as they crashed the economy” if the announcement is “not backed up with the money needed”.

The Labour backbencher stressed that the childcare sector has been “systematically underfunded for years” and that “already 50% of staff in nurseries say they’re overworked and overwhelmed”.

She told viewers: “Unless they are paid properly, unless that gap in funding is met – so we fund the three- and four-year-olds properly as well as the one- and two-year-olds – this is going to add to the pressures.

“Like Help to Buy did – it stoked up demand but it didn’t deal with supply, so in the end, it was more expensive to get on the housing ladder not less.”

According to the Guardian, the Chancellor is planning to raise the hourly rate paid to childcare providers by the government to deliver the expansion in provision. The government reportedly also intends to give funding to local authorities to introduce wraparound childcare provision in schools from September 2024.

Commenting on the plans, the Sutton Trust said Hunt would have to assure the childcare sector that the measures would be properly funded. The social mobility charity warned: “If not, the expansion will likely exacerbate provider financial problems and risk the sustainability of many.

“Many providers currently cross-subsidise underfunded ‘free’ hours with hours charged at higher prices to parents elsewhere. With an expansion of free hours to one- and two-year-olds, there will be fewer places where providers can make up these costs.”

The Confederation of British Industry recommended in its spring Budget submission that the government should announce investment and reform to childcare and early-years support to create an “accessible and affordable system”.

It said this should include launching an independent review of childcare, increasing funding “so providers receive funding that reflects the true cost of service provision” and rolling out existing provision for three- and four-year-olds to all one- and two-year-olds as well – at an estimated cost of £8.9bn.

Creasy said this morning: “We’ve got to see the detail today. But when the CBI is telling us it’s going to cost twice as much as the government is promising, I think parents everywhere need to keep the champagne on hold until we actually see that the money is there.”

Bridget Phillipson said in a speech last week that Labour in government would “build the social infrastructure long overdue after 13 wasted years”, including a “modern childcare system that gives families choices, enables parents to work and delivers the best start for every child”.

“Be in no doubt: childcare reform will be my first priority, to deliver that mission to break down barriers, to give every child and every family the best start in life,” the Shadow Education Secretary said.