Newquay I realise that childcare is perceived as being expensive for parents, but what needs to be remembered that the childcarers who look after peoples precious children also need to make a living. A lot of nursery staff are paid minimum wage and childminders can charge as little as £3.50 per hour per child because of the 'going rate' where they live. As I said to Sufuller I am a Registered Childminder and am fortunate to live in part of the country where my charges are higher than that, but then so are our cost of living expenses. I am 10 years away from retirement and work a 50 to 55 hour week looking after other peoples children, as do my dh & dd2 who also work with me. Yes I have a bigger setting because of that, but we also have to pay ourselves wages from which we have to pay our bills and mortgage so do not really have very much left over at the end of the month for luxuries.
The other thing to consider regarding childcare costs is that although a childminder could be earning some money whilst his/her children are young, that often means a restricted income as due to ratio regulations we are only allowed to care for 3 young children at a time including any of our own in that age range. Therefore if a childminder already has a child at home her income is automatically reduced by that child's potential fees, therefore reducing her income. A lot of childminders claim tax credits in some form or other because of their low income, but are now expected to prove to HMRC that they are looking to 'grow' their business and that it is financially viable before they can 'earn' their tax credits. This causes problems for those on a limited income due to their own children, that they are needing to claim tax credits for, as they are unable to take on more business due to Early Years ratio regulations.
The funded hours that people can claim for their 3&4 year olds are not generally funded at the same amount as we would charge a parent for the same hours, however we are expected to accept the shortfall, still cover our costs, pay ourselves wages on a loss making amount. An example for me is I charge £5.20 per hour the funded amount for 570 hours per year is £3.77. Therefore if I was to offer the full funded hours to the potentially 3 funded children that wanted to claim it, I would be losing £815.10 per child, £2445.30 annual pay cut in effect if offered for 3 children.
Perhaps you can now understand why providers are reluctant to take up the new 'free' childcare provision from September 2017 as that could potentially financially ruin a business as their overheads are not being met through the funding provided. Yes we have been promised the rate will be higher than we are currently paid, but it is down to individual LA's to set their funding rate according to a complicated funding formula and amounts currently being quoted by the government are only indicative and not definitive. Indeed they have already had to amend the amounts as providers in the trial areas have been refusing to offer the 30 hours due to the funding shortfall. We are not allowed to charge parents for the extra to cover our costs because it is 'free' childcare.
However, we are also businesses with associated costs, some of which are very high, especially the staff costs with the new pension contributions having to be included in those now.
I only wish more people would understand that childcare costs are not high, they are low in comparison to the wages paid. I know European childcare costs are often quoted as being less, but then they are more highly subsidised than ours are under different taxation and benefit systems and different costs of living.
I will come off my 'high horse' now and hope that some of you will now understand why there is so much dissent in the childcare 'industry' and why childminder numbers are dropping so dramatically recently.