Potential Impacts of Extended Childcare Provision on Community Buildings in Sussex

Context

Currently a significant proportion of childcare provision through pre-schools and parent and toddler groups within the rural parts of Sussex is delivered in multi-use settings such as village halls, church halls, community centres, sports pavilions and other buildings shared with community groups, clubs and societies.

This relationship is generally regarded as mutually beneficial, with childcare providers able to offer an essential local service which provides cost-effective childcare for local people, whilst receiving a preferential (often discounted rate) which still provides community buildings with a regular and stable income.

Consequently, changes outlined in the Childcare Act 20161 to extend ‘free’ childcare provision for eligible three and four year olds from 15 hours to 30 hours a week may not only impact directly on childcare providers, but have a corresponding effect on the venues from which their services are delivered.

Current concerns

Action in rural Sussex has received queries from those involved in the operation of community buildings. Through this dialogue it has become clear that there is concern that changes to childcare provision may have a number of potential knock-on effects which may impact on the operation of community buildings.

It is important to note that this document reflects concerns raised by a limited number of
community building operators, from which we are seeking to better understand the scale and significance of the issue(s). To date, no direct engagement has occurred with childcare
providers, either those in the community buildings that have expressed a concern or more
widely.

It is apparent at this stage that greater clarity is required on the detail of the process being
followed to deliver the extended childcare capacity and the outcomes this may generate.

Potential issues for Community Buildings stemming from changes to childcare provision:

Capacity
If the delivery of extended childcare provision leads to alterations in the number of hours which a provider delivers, such as seeking to deliver the full 30 hours (combined universal and extended) provision, it may have a range of impacts.

Firstly, it may alter the number of hours in which other groups are able to utilise the building, which given its function as a ‘community’ facility may bring them into conflict with the childcare provider. The impact of this is likely to be most significant in those buildings unable to provide separate and secure spaces for childcare provision to occur whilst others activities occur in parallel under the same roof i.e. have more than one room and ideally separate toilets/kitchen areas.

Secondly, given that childcare groups often receive preferential or discounted booking rates, it may mean that to increase the length of their bookings at these lower charging rates may reduce the amount of booking time which the building is able to offer at commercial rates to other organisations, potentially reducing the income (and profitability) of the building.

If the building is not able or unwilling to cater for an extension of childcare hours, it may
ultimately lead to a withdrawal of childcare provision from the venue, which may not only have significant implications for its financial sustainability but also remove an essential local service and impact on the lives of local parents dependent on it.

Space & Facilities
Whilst community buildings commonly seek to maintain separation between childcare groups and other ‘users’ (where possible), this can be difficult to achieve, particularly in smaller and/or older community buildings.

An increase in the number hours in which childcare takes place may limit further the amount of time available to others and place competing demands on the use of space in those buildings where separation of activities is challenging to achieve. Whilst childcare providers represent significant and valued clients, occupation of a multi-use facility for 30 hours a week may force them its operators to consider the impacts of this on other users.

If multiple activities cannot be accommodated, it may in extreme cases lead to limits being
placed on the hours offered to childcare groups, which in turn may force them to provide a
limited service or even seek alternative venues. This may subsequently alter the pattern of
childcare provision, with knock-on impacts on the community currently being served (e.g.
forcing parents/guardians to travel further), but also remove one of the key sources of stable income on which community buildings rely.

One option would be to explore how buildings could be renovated or extended to
accommodate any changes, which would help to limit any conflicts by expanding and
delineating spaces between childcare groups and other users. However, community buildings may not possess sufficient capital reserves to cover the cost of the substantial refurbishments or extensions. Similarly, the process of applying for grants is labour intensive and could place additional pressure on already limited volunteer capacity.

Scale & Distribution of Demand
Smaller communities in which childcare provision is often located in a community building may experience issues due to the limited number of children with parents eligible for the extended offer. In circumstances where the number of children of the appropriate age (3 and 4) utilizing childcare is small and the proportion of those eligible for the extended offer is even smaller, it may be less likely for a childcare provider to participate in the scheme as they may be unable to cover the costs of so doing. This could be most problematic where providers do not currently offer sufficient provision to cater for the full 30 hours.

Such a scenario may not only disadvantage those who are eligible but whose current childcare provider cannot financially or logistically participate in the scheme, but may also risk these clients seeking to use providers located elsewhere who are participating in the scheme, which in turn may also risk reducing the income and potential viability of the original group.

The knock-on impact of this may be that the pattern of take-up by providers’ leads to some
childcare groups shrinking in size and others increasing in size, depending on who participates in the scheme and the decisions taken by those in adjacent areas. Alterations in attendance numbers may in-turn affect whether the community buildings they use can effectively cater for their changing demands, potentially leading some groups to seek alternative venues, which may have a detrimental effect on the income of those which lose out.

Income & Viability
Concern has been raised about the hourly rate being offered by the government to childcare providers as part of the extended hours’ commitment and the impact which high levels of takeup at this rate may have on their viability. This in turn has implications for their ability to cover the costs associated with their delivery venue, which itself is reliant on its income.

Many childcare providers currently offer services in which they receive a fixed-rate fee per
hour for those children utilising the government’s universal childcare commitment, and a
market-rate fee (usually higher than the government provided fee) which covers the hours
purchased outside of this commitment. The ability to cover operating costs is determined by the relationship between these two figures.

The proposed changes may mean that providers have to accept the government rate for those hours which will be covered by the extended hours commitment, rather than the higher market rate which they currently receive. Consequently this may lead to an increase in the proportion of clients receiving government support, potentially meaning that any shortfall in costs can only be recovered by increasing the charges made against those who are not eligible.

This may be particularly significant where providers have a high proportion of clients eligible for the extended provision and it becomes increasingly difficult to levy higher market rates against those who are not eligible. Similarly, childcare providers in more isolated rural locations, where there are smaller pools of clients, may have less scope to restrict their services by not offering extended provision, but be disproportionately affected where there are high rates of eligibility and take-up.

Any loss of revenue resulting from take-up of the extended childcare scheme may impact on the ability of the provider to cover their costs with the community building, even where they currently receive preferential or discounted rates. Consequently, it may threaten not only their own viability, but potentially in a worst-case scenario that of the building.

Conclusions
Childcare providers differ in the venues they utilise, the days on which they operate, the hours they keep, the number of children they serve, how much they charge (per child per hour) and how they are staffed. Similarly, the capacity, facilities, size and charges of each venue may vary. Consequently, drawing universally applicable conclusions on the likely impacts to community buildings from changes in the operation of childcare providers is difficult to achieve. To do so, more detailed information on the anticipated roll-out of extended childcare provision is required.

Currently many operators of community buildings are seeking to plan bookings (and income) for the 2017-8 financial year, but to do this effectively they are reliant on information provided to them by their clients. Whilst dialogue may be occurring, it is apparent that childcare providers could be unaware of the implications of their decisions on the community buildings they utilise.

In order to allay any unwarranted concerns amongst community building operators, but also to put them in a position to proactively engage with any changes, there is a necessity to provide them with a better overview of the process associated with the provision of extended childcare. In particular, the timeframe for change and any implications that may result from significant changes to the format of delivery, such as time requirements, space requirements and funding levels.

Contact Us

If you are involved in operating a Village Hall in Sussex and have any information regarding this issue or experiences that you wish to contribute then we would be extremely happy to receive them via villagehalls@ruralsussex.org.uk

Our goal is raise the profile of this issue and encourage those running village halls and community buildings to proactively engage with childcare providers operating from their facility. This will enable both parties to explore the implications of any changes.

“Supporting rural communities in Sussex to be vibrant and diverse places in which to live and work.”