15/03/2023
After todays budget news I just wanted to share this analogy of how funding “works” for childminders……
This is not my words I have copied and pasted from Champagne Nurseries on Lemonade Funding…
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The Struggle of Early Years Settings
Imagine you run a jellybean shop. Some shops are national chains, others are little independents or maybe local chains, some are operated by charities for no profit.
It costs stores between £10-£12 per box of jellybeans, including all business and staffing costs. Customers pay between £13-£15 for a box of beans, variable region to region and shop to shop.
Jellybean addiction covers almost half the population, and not having jellybeans prevents people from working. Some people do choose to make their own jellybeans at home but this takes so much time they can’t afford to work. So, the government decides to fund jellybean subscriptions for people diagnosed with jellybean addiction. They offer 10 boxes per week, and they’ll pay stores £6-£7 per box, depending on region. Now, shops have to subsidise the boxes they’re giving away for less than it costs them. So they have to up the price of paid for jellybean boxes to cover the difference. Demand for paid-for boxes has also gone down as addicts have a reasonable supply, so you’re charging £20-£30 per box now.
Despite charging significantly more to make up the cost, jellybean stores have been shutting at a significant rate since the policy, especially charity-led shops. Those that do remain open receive harsh criticism from jellybean customers due to the high prices, and often aren’t making any profit (despite having invested to open the shop and needing to recoup their costs).
Recently, business costs have risen meaning that each jellybean box now costs £15-£18 before profit. The government first refused to increase their £6-£7 per box payment; but then relented with a ‘significant’ increase to £7-£8 per box, depending on region. They also increase the subscription to cover newer jellybean addicts, so even fewer people will need to buy paid-for jellybeans.
Because jellybean addiction is permanent and not having jellybeans prevents people from working, people see jellybean shops as essential services. But, at the end of the day, no one will support a shop to stay afloat when they’re losing money. So jellybean shops will continue to shut, even more rapidly, and those that remain open will refuse to offer government subscription jellybeans. The few that do offer jellybeans on government subscription will worsen their jellybean recipe to make them cheaper.
That’s the situation of early years settings right now. But replace shops with settings, jellybean addiction with having children, and jellybeans with childcare/education.
It doesn’t matter that Early Years Education and Care is essential. It matters that providers are being forced to operate on utterly inadequate funding, receive hatred from parents when they try to remain afloat, and have to independently come up with the best extra money to remain open whilst providing the government funding. That’s the problem. And that’s what the new budget will make worse.
