Nurseries cost more than private schools. Well of course they do – duh..!!

Cost of Childcare
I am breaking my rule of one blog post a week, because tweeting simply cannot give credibility to the confusion in the media elicited by the annual childcare cost survey.

The survey tells us what parents pay for childcare. It does not address either the actual cost to provide childcare or who should bear that cost. ‘Nurseries are more expensive than public schools’ scream the headlines. Guys, nurseries cost what they cost.

Nurseries are not great generators of profit. LEYF does not cream off a load of profit so we can all be paid more than 900 times that of our lowest staff member like Sir Terry Leahy at Tesco. Nurseries do not operate like banks with the Chancellor crawling to Brussels to justify bankers keeping large bonuses. If the £600m about to be spent at RBS on bonuses for bankers were available to the childcare sector, we could double the number of two year olds getting their free 15 hours, or even double the time to 30 hours for those already using the nurseries. (A much better use of money in my humble opinion.)

Here is the reality: nursery costs are made up of 77% staff cost; the rest is rent, food, equipment, training and the unexpected. There is little opportunity for vast profits; and in our case, as a social enterprise, any profit we make is reinvested to keep fees low and quality high, support parents in difficulty, develop training opportunities for apprentices and increase our contribution to local communities.

No one complains about what schools cost. That is because we have agreed as tax payers to fund education. If we had to pay for our education, we would be paying the same as private school fees (which is the real cost of education). The question therefore is this: should we pay for childcare as part of the education offer??

Mainland Europe has decided to do this, and pays up to 100% of the costs. It would certainly make my life easier trying to keep fees low and quality high if the UK would follow suit. But what about the free offer I hear you say? We have been complaining for nearly 10 years that the free offer is insufficient. The NDNA pointed out in a recent report that members are making a loss of £500 per year for every child in receipt of free nursery entitlement hours. In London a childcare place costs at least £6 per hour for high quality childcare. The Government pays anything between £3.66 and £4.80. Even those of us without a C in GCSE Maths can do the sums: yep, a shortfall of £1.80 per hour per child. Add that up and it soon becomes a big gap.

The issue of what childcare costs will never go away until we have a big discussion and decide whether we as tax payers should fund the central costs of childcare. It’s certainly worth the outlay, and the return on such an investment is great. For those taxpayers who see having children as a private matter, then let me remind them it is these children who will be funding their pensions during a long old age.

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  1. #1 by psw260259 on March 10, 2013 - 9:48 pm

    Once again June I find myself in agreement with every word in your blog – however as I have also blogged about the issue of central funding via our tax system for childcare, and have even written an article on the subject – it is not a surprise that I agree with you.

    Childcare is expensive FULL STOP

    However investment in high quality childcare for every child whose parent wants their child to receive it would in my opinion repay to society in the long term many times over.

    As a childminder I consider myself very lucky to be able to run my own childcare setting and to watch the children in my care grow and develop. However I certainly don’t make a fortune from childminding – I take out £1,100 pounds a month as my ‘wage’ and I pay around £1,300 a year in tax and national insurance on my so called profits – so I get about £1,000 a month for working 60 hours minimum hands on with the children and about 20 hours doing paperwork, cleaning and preparation – so 80 hours a week (and even on my annual leave I do things like my tax return, go to conferences and so on.) So that is a massive net income of around £3 per hour. The rest is used to buy new resources and equipment, to run the car – a necessity as I collect children from home and take them back at the end of the day, to pay for craft materials and food, for outings, and for training.

    But I don’t need to tell you that or the rest of the early years practitioners – none of us are getting rich and a lot of us are now facing sustainability issues – I would not want to make my fortune at the expense of parents and as I say I love my job and consider myself to be very lucky – but I am fed up with the headlines and government statements that suggest childcare is expensive because I and my childcare colleagues charge too much – and by the way, as I live in an area of low wages, my parents pay £2.70 per hour.

  2. #2 by Paddock, Shirley on March 7, 2013 - 12:36 pm

    Good for you June.

    Shirley Paddock
    Early Years Development and Safeguarding Manager
    215 Lisson Grove
    NW8 8LF
    Tel: 020 7641 3929
    Fax:020 7641 1932

  3. #3 by Sue Webster on March 7, 2013 - 10:30 am

    Hi June,

    A second blog this week is just what we needed. Thank-you for putting into words, so skillfully, the arguments for and against the government and media perceptions of our field of work. I am glad that you respond to those who never let the facts get in the way of the argument!
    Your logic is faultless, it seems to me that we need a national debate on what is really important in our society, what is our national vision, beyond the notion constantly striving to be rich and powerful? Perhaps by supporting our children to be happy, healthy, curious and independent learners, we could achieve success anyway? Would hate to think that the overall aim of these changes is to divide, rule and with just a few of our population getting rich beyond even their wildest dreams.

    Best wishes
    Sue Webster

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