Fair Funding Letter
I am writing to you to let you know of some changes to the funding structure for Early
Years education, and to explain how this affects our setting, and you.
Amid great fanfare, last year the government announced that it intends to expand
access to ‘free’ childcare to all 2-year-olds from April 2024. On the surface, this seems
a great idea to help working parents with the soaring costs of childcare. And it would
be a great idea, if only the funding were adequate to meet the costs of providing it, and
if the government were honest about the pressures the inadequate funding puts on
childcare providers, such as us.
‘Free’ is not free

Abington Annexe Community Childcare is the name of the registered charity that
operates both Abington Preschool and Out-of-school Club. We are a not-for-profit
organisation, and as such we re-invest all our income into the running of the setting.
Currently, every 3- and 4-year old is entitled to universal 15 hours’ funding per week.
This is extended to 30 hours for children whose parents meet the eligibility criteria.
Most children at our Preschool are funded: they receive 15 or 30 hours of ‘free’
education from the government. This – as the government likes to boast about – means
that parents and carers are supported with their childcare needs, but critically, the
funding the government gives us for these hours does not cover our costs of providing the
care.

It’s not even close.

The basic cost of caring for a 3- or 4-year old is about £6.45 per hour, yet the
government gives us just £5.40 per hour. For every 3- or 4-year old in our care, we’re
losing over a pound an hour. When you consider that we’ve usually got about 18 such
children in our setting every day, we’re looking at a funding shortfall of £113 every
single day. This is before we consider any additional costs, such as for snacks,
consumables, or outside provider activities.

This woefully inadequate funding seriously affects our sustainability; indeed, the
sustainability of every preschool in the country: over 5,000 childcare settings closed last year.

Despite some high-profile debates in parliament on this issue, the
government has chosen to ignore the pleas of the entire industry and roll out this
unsustainable system still further. Our funding crisis is going to worsen from
September 2025, when this entitlement will be increased to 30 hours per week along
similarly inadequate lines.

We have scrimped and saved every penny, but we cannot do any more
As funding pressures have worsened over the years – particularly this last year – we
have found many creative ways to provide our excellent care and education on the
smallest possible budget. But there is only so much we can do: we’re now at a point
where there are no extra pennies to save anywhere.
After much consideration, we have taken the difficult decision to introduce an
additional charge of 80 pence per funded hour: a fair funding and sustainability

supplementfor all children attending the Preschool for government-funded hours.
This is to cover additional costs, such as snacks, consumables, and outside provider activities. This
does not affect your funding entitlement: parents still have the flexibility to use funded
hours however they choose across the week, with no restrictions on when or how

these may be accessed. This is a voluntary charge: if you have concerns then please get
in touch.
May I remind you also how dependent we are on fundraising to fill the funding
shortfall. Please do support our events where you can; recently, enthusiasm and
attendance at our fundraising events has dwindled, and this directly reduces the funds
we have available to buy resources and equipment for the children. If you wish to get
involved with any fundraising activities, or can otherwise offer support to the setting –
please do talk to us.

Kind Regards,
Alice Kirk & Louise Woolcott

Alice Kirk, Chair of Committee
Louise Woolcott, Finance Manager