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Third of nurseries could shut due to free childcare scheme

Almost three-quarters of childcare providers say funding for the 30-hours offer does not cover the cost of providing a place, with a third fearing closure because of it.

By Stephanie Otty | Published: 1st September 2017 News Updates

The Pre-Scool Learning Alliance surveyed around 1,400 childcare settings in August 2017 about the 30-hour offer. 49% of those asked said that they planned to increase how much they charge for additional, non-funded hours in order to make-up the shortfall. 52% said that they would increase the cost of other services, such as food or trips out.

Alarmingly 38% of those who responded said that they didn’t think their setting would be sustainable in 12 months time.

Neil Leitch, chief executive of the Alliance, said: “As one of the government’s flagship policies, the launch of the 30-hours offer should have been a day of celebration. Instead, all we have is a policy in chaos.” He said that parents were now facing additional charges and unexpected restrictions on the offer.

Neil added: “We cannot wait for this problem to solve itself. Every week we’re hearing of more and more parents struggling to find places that actually suit their childcare needs. Every week we’re hearing of more and more childcare providers being forced to shut down as a result of the 30 hours. This simply cannot continue.”

Eve Wort, formerly principal at Anchors Nursery School, Hampshire, closed her setting at the end of this year’s summer term as a result of the offer. She said: “Our funding was reduced from £4.44 per hour to £4.36, when our hourly costs are around £6 per hour. Without being able to charge supplementary fees, our traditional nursery school operation is not sustainable.”

Unwilling to sacrifice quality or reduce staff-to-child ratios, Eve said the setting had no other option but to close. She added: “It is very sad that this government is having such a damaging effect on the diversity of childcare provision.”

Karen Simpkin, managing director at Sunflower Children’s Centre in Sheffield, says that she is limiting the number of places her setting is offering and plans to review whether or not to continue at the end of this term.

Karen said: “The main issue is the funding. Even if you only take into consideration the national minimum/living wage, the margins are extremely tight and not realistically do-able. On top of that, I’ve got to cover business rates, utilities, admin, cleaning and equipment – the list is endless.” She says that if the setting makes too much of a loss on the 30-hours, it will stop offering the places altogether.

Karen adds: “Why should a reputable business have to ask for donations to make-up the shortfall from this poorly thought-out and poorly funded policy?”