Freedom of Information requests submitted by the NDNA have revealed that local authorities are failing to pass on the money for funded childcare places, showing councils were holding back millions of pounds to offset deficits or add to reserves. Over 90 of the 150 local education authorities that responded underspent almost £46m in total last year.
Fifteen LEAs underspent by at least £1m each, while five of those underspent by a similar amount in two of the previous three years. The NDNA calculated that over the past four years there had been a £229m underspend of funds intended for providers of funded childcare.
The government is looking to expand the funded childcare scheme to offer places to working parents of all children over the age of nine months. However, childcare providers have long complained that the scheme is chronically underfunded.
Claire Coutinho, the minister for children, giving evidence to the committee, acknowledged it had been a challenging time for the childcare sector, but said the government was putting in an additional £4bn to fund its childcare policies.
Purnima Tanuku, the NDNA chief executive, said: “This is our fourth year investigating underspends in early years funding and once again, the results are shocking. NDNA has been calling for this money to be ringfenced so it can only be used for early years places.
“At a time when providers will be under pressure to get ready to deliver funded places for all two-year-olds in less than a year’s time, they should be better supported by councils. This system needs fixing and reforming now if the early years sector is going to have a hope of delivering the government’s new plans.”
The Local Government Association, which represents local authorities in England and Wales, said its members fully understood the financially challenging situation providers were in and were doing what they could to support them.
“However councils often face challenges in relation to when money is received from government and have to manage this to ensure providers receive funding. Where this is an underspend, this is also often reallocated according to local need, such as to support children with additional needs, so the money is still invested in early years provision.”
The full story, as reported in The Guardian, can be read here.