Nurseries risk closure due to government childcare policy

Four in 10 childcare providers fear they may have to close within the next year as a result of the government’s 30-hour offer for three and four year olds, according to a new survey by the Pre-school Learning Alliance.

A linked survey by Mumsnet found nearly half of parents taking up the 30 ‘free’ hours had been charged additional fees and charges.

An online survey conducted by the Alliance, which received 1,662 responses from nurseries, pre-schools and childminders in England, found that:

• Eight in 10 childcare providers say that the childcare policy would have a somewhat or significantly negative effect on them if their funding rate stays the same next year.
• Around half of providers have increased parent fees as a result of offering 30 hours, while four in ten (42%) have introduced or increased charges for additional goods and services.
• A third plan to increase fees for non-funded hours over the next 12 months, and one in five plan to introduce additional charges.

Increased costs for parents

A separate online poll conducted by Mumsnet on behalf of the Alliance, which received 1,143 responses from parents of three- and four-year-olds, found that:

• Just under half of parents accessing 30-hours places have been asked to pay additional fees for non-funded hours since taking up the offer
• Four in 10 have been asked to pay for new or additional charges for goods and services
• Three in 10 have had difficulties renewing their 30 hour eligibility online.

The policy was rolled out in England last year.

Frozen Funding Levels

Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “There’s no doubt that the 30 hours scheme has been popular with parents, but at a time when providers are struggling to keep their doors open, this simply cannot be the sole measure of its success. The fact is that even those providers who are technically managing to make the 30 hours work are often only able to do so by introducing or increasing additional fees and charges. Is this what the government meant when they promised parents 30 hours of ‘free childcare’?

“And while better off parents may be able to shoulder these unexpected costs in the short-term, those on the lower end of the income scale – the families that the government claims to be so committed to supporting – are the ones who are likely to suffer as a result.

“Worse still, things are only going to get more difficult, with early years funding levels frozen until 2020 despite the fact that provider business costs like wages, mortgages and rents will inevitably rise over this time. How many increasingly expensive ‘additional costs’ will providers be forced to introduce, how many providers will be forced to close their doors, before government admits there’s a problem? The inescapable fact is that, as these figures show, without urgent action, the 30 hours policy is simply not viable in the long term.”

The Education Secretary Damian Hinds told The Guardian later in the week that funding levels for nurseries would remain the same for now, but were under review.

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