The proposed plan by HM Government to extend the childcare support to a wider audience has generated lot of excitement among parents and looks like lot more money is going to be flowing into the childcare sector. Additional money flowing into a sector is generally a good news but many nurseries seem to be worried about the financial impact this development on their business. At a time when costs are rising and budgets are tight, it can be challenging to navigate this new landscape while maintaining the high-quality care and education that parents have come to expect.
Before we get to discuss the apprehensions and potential mitigators in details, here is a quick summary of the new budget proposal curtesy Chat GPT 😊.
- Free childcare will be extended to support more parents returning to work after parental leave ends.
- Currently, parents who work more than 16 hours a week and earn less than £100,000 are entitled to 30 hours of free childcare a week for children aged three to four.
- The scheme will be expanded to include working parents of all children over the age of nine months from September 2024.
- Parents of two-year-olds will be eligible for 15 hours of free childcare from April 2024.
- From September 2025, working parents of children under the age of five will be entitled to 30 hours of free childcare per week.
- The hourly rate paid to childcare providers will be increased, and the number of children a member of staff can look after at the same time will be increased to five.
- Local authorities and schools will be given more funding for wraparound care.
- Parents on Universal Credit will be able to claim up to 85% of childcare costs upfront, with the maximum amount of support being increased by almost 50%.
Also, you may read the full article here.
My take is that on an overall basis, this is a great news for the sector. While the apprehensions about increasing costs and viability of top ups are reasonable, the proposal will bring better economies of scale which cannot be bad. Although it may feel a bit uncomfortable at the beginning, we will be forced to consider some of the newer ways of working that might serve us well in the long run.
I would like to propose a few strategies for nurseries and childcare providers to make the most of this development.
- Streamline Your Operations
One of the most effective ways to reduce costs is to streamline your operations and a larger scale presents a natural opportunity to do so. Look for ways to optimize your processes and reduce wasteful spending. This could involve using more energy-efficient equipment, optimising use of the facilities or finding ways to reduce staff hours without sacrificing the quality.
- Invest in Technology
Technology can be a powerful tool for reducing costs while improving the quality of care you provide. Go paperless. Choose a modern Nursery Management System (NMS), consider implementing online payments, automated attendance etc.
- Innovate
One of the first casualty of cost pressures is staff quality which in turn affects the quality of learning and care. These days there are many innovative technology-enabled solutions available that can help you deliver the same quality of service with less qualified staff. Such learning platforms on one hand can deliver readymade content, interactive activities, well-crafted learning plans, they can also engage parents and seek collaboration from them. (Disclosure: Author works with one such solution company, Bablr Early Learning).
- Focus on Staff Training
Investing in staff training and development can help reduce staff turnover and associated costs. By providing ongoing training and professional development opportunities, you can ensure that your staff is equipped with the skills and knowledge needed to provide high-quality care and education for children.
Consider offering in-house training sessions or partner with external providers to offer professional development opportunities for your staff. This not only improves the quality of care you provide but also helps to retain your best employees.
- Build Partnerships
Consider building partnerships with local schools or businesses to offer additional services or programs that can benefit both parties. For example, you could partner with a local primary school to offer after-school care or summer programs, or team up with a local business to offer discounted rates for employees. By building these partnerships, you can tap into new revenue streams and reduce costs while providing additional value to parents and children.
In conclusion, the UK government’s offer of 30 free hours of childcare for children from nine months old may present a challenge for nurseries, but it’s important to remember that quality early learning services are still in demand. By streamlining operations, investing in technology, innovating, focusing on staff training and building partnerships, nurseries can actually take their business to the next level.
