The Welsh Government has committed to reviewing the hourly rate paid to childcare providers annually, rather than every three years.
It comes after providers and sector bodies urged the devolved government to reconsider the regularity of reviews amid rising business costs.
In Wales, children aged three and four whose parents are in work, training or education are entitled to 30 hours of funded childcare over 48 weeks a year. Children under the age of four from deprived families can access 12.5 hours of funded childcare for 39 weeks of the year through the Flying Start programme, which will eventually be expanded to all two-year-olds.
In a written statement, Dawn Bowden, minister for children and social care, said, ‘We recognise the need to support an environment where the sector is able to thrive and grow if we are to deliver our ambitions set out in our Early Childhood, Play, Learning and Care Plan. Taking into account the views of the sector, we will move to annual reviews following the completion of the current three-year review. This approach will support the sector with planning and improve sustainability.
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA) Cymru, said, ‘Over the last few years, we have seen how susceptible early years settings can be to inflation and economic changes, so it’s important that governments review the rates they pay for funded places on an annual basis.
‘As we have seen with National Insurance Contributions and statutory minimum wage rises, and the latest inflation data, if rates don’t keep pace with rising costs this can negatively impact the sustainability of early years providers. This in turn has a knock-on effect for families and children who rely on high quality early education and care.’
Chief executive of Early Years Wales, David Goodger, commented, ‘We are really pleased to see an increase in the regularity of the childcare hourly rate undertaken by the Welsh Government. Regular reviews will help make sure the rate is able to reflect the costs faced by providers, adding more stability to the sector. ‘
