Complaint submitted by Campaign group Champagne Nurseries, lemonade Funding

Campaign group Champagne Nurseries, lemonade Funding (CNLF) has submitted a complaint to the Competition and Markets Authority (CMA) about the Government’s abuse of its position as the biggest purchaser of childcare in the UK.

CNLF was started in March 2016 by two-day nursery owners who were frustrated about the underfunding in the Early Years. The nursery owners were angry that the Government was forging ahead with its plans to double the amount of ‘free’ childcare for working parents whilst ensuring that the legislation around funding means that providers are forced to cross subsidise and charge additional services or absorb the losses incurred to provide their services for funding rates that do not match the cost of delivery.

The campaign video was put together and the awareness campaign got underway, aiming to educate parents about the low level of funding and to raise awareness that funding rates do not work, the key message is very clear ‘ADMIT IT, (it’s not free) REMOVE IT’, we must be able to use the funding as a subsidy.

As awareness grew, the 2 founders of CNLF were joined by others from within and outside of the sector, with knowledge of Early Years, business, media and marketing, to drive the campaign forward. The team undertook a huge amount of research into the legalities around the funding and potential ways to challenge the Government over this policy that has caused so much uncertainty, frustration and anger in the sector.

The decision to report the Government to the CMA was based on the research conducted, it became increasingly obvious that the Government is abusing its position in the market by fixing the price at which we sell our services to parents, by insisting the hours be given as ‘free’ and by fixing the price they pay for our hours by deciding how much to give each Local Authority and legislating on how much the LAs can retain for their costs.

We took legal advice and were advised that this was one of the options available to us which would mean that the legalities around the funding would be looked in to. We are clear that we are calling for a change in the legislation, so this is a huge step in the right direction.

The report was put together, based on all our evidence, it contains an overview of the current situation; the reasons why we believe the Government is abusing its position, the way it controls prices and its abuse of its legislative powers. It was submitted on Sunday evening. The CMA have ten working days to respond, then they will follow their own processes, and we await the outcome.

The reality is that there are some settings who have already closed, citing the introduction of 30 hours as one of the main reasons for their closure, with lots more having genuine concerns over their future viability, the effects of this policy on the families who need them the most and the effects on the children, who are at the heart of everything we do.

The Early Years sector is facing so much uncertainty, many providers still do not know their new rates,we have the recruitment crisis, caused to a large extent by the lack of new entrants to the sector due to the GCSE requirements; rising costs due to legislation on NLW and pensions and the lack of information about eligibility checks and provider agreements. The Government have also made it clear that there is no planned review of the new funding rates, so providers face increasing costs with stagnant or decreasing funding rates.

One of the things that we are most proud of is the way the sector seems to be more united now than it has ever been, we have over 9000 people on the page, from all areas of the sector and it is great to see different types of providers coming together to offer each other support, help and guidance, with such an uncertain time ahead of us, we need this unity now more than ever #unitedwestand.