Nurseries struggling to make ends meet

This week eligible parents of nine month olds in England will be able to benefit from the 15 hours of ‘free’ early years education during term time. The extension comes after a similar move for two year olds in April. By next September the plan is to double this to 30 hours for all eligible children from the age of nine months.

It sounds great, but nurseries have been sounding the alarm bells because of historic underfunding of the ‘free’ hours and acute staffing shortages. Neil Leitch, CEO of the Early Years Alliance, said: “As our own research shows, settings simply do not have the capacity to meet the likely surge in demand, with 78% of settings struggling to recruit and more than a third actively considering leaving the sector. On top of this, years of underfunding has made it increasingly difficult for providers to deliver enough high-quality early years places using funding alone, prompting many to limit intake, or increase fees for hours falling outside of the expansion just to keep their doors open.”

He called on the Government to swiftly address the historic levels of underfunding and the sector’s severe staffing crisis. 

Staffing and capacity

Workingmums.co.uk has been speaking to nurseries over the summer to find out how they are managing. Last week we spoke to Nishrin Alibhai who runs Little Elms Montessori nursery in Potters Bar in Hertfordshire.

She says she is able to cope with the expansion this month as the nursery is not at capacity and has only recently decided to expand to take on one year olds.  By January, however, things could change and she will need more capacity.  She is also switching from term time only to full time in order to survive financially. This is because the ‘free’ funding doesn’t cover running costs, which are likely to increase in the next months as rent and bills rise.

The underfunding problem is particularly acute for three and four year olds which means, says Nishrin, that it may make more financial sense for nurseries to gear towards younger children despite the tighter staff to child ratios. Another problem is that many of the parents who are inquiring about funded hours only want the funded hours, making it impossible for her to make up the shortfall.

Nishrin says there is demand for the extra funded hours, but that many of the nurseries around her are full time. “To survive we have to adapt,” she says.

On the staffing front, Nishrin says she is ok for the moment, but will have to take on more to cope with the expansion in January. She is worried that will be challenging, given the nursery will be open all year round. Many will need to be trained up because nurseries are unable to offer high salaries. Nishrin says she would love to pay her staff more, but she simply can’t afford it so she has to think of other benefits she can provide, including training, yoga sessions and days off.

Financial support

Nishrin says that if only the Government would increase the rate it pays for preschoolers to £7 an hour [from around £6] it would make a huge difference to the nursery’s finances. Little Elms doesn’t charge for extras such as nappies or food, but it does ask parents if they can bring in their own nappies. Nevertheless, it has a supply it can use.

Another big issue is space. Nishrin would like to open a new classroom for younger children from January, but says she will need financial support from the council to do so. “We cannot afford it without help,” she states. 

Potters Bar is in affluent Hertfordshire, far from the ‘childcare deserts’ where nurseries have already folded due to underfunding. If even nurseries there are finding things hard it is clear something needs to be done.

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