The gap between the government’s £4.3 billion investment in the expansion of funded childcare and the cost of delivering the hours for providers could lead to a £5 billion shortfall, a think tank has warned.
The Women’s Budget Group (WBG) has issued the warning ahead of the first stage of the expansion’s roll-out in April which will eventually see all children aged between nine months and four years old, from eligible working families, entitled to 30 hours of funded childcare per week from September 2025.
The group says its estimated shortfall is based on the DfE’s £4.3 billion investment, announced in last year’s spring budget, compared with minister’s forecasted costs for 2020/21 which were provided to the Early Year’s Alliance in response to a Freedom of Information Request submitted in 2015.
This revealed that the government estimated that £7.49 per hour on average would cover the full cost of places for three- and four-year-olds.
