Nurseries have been left cash-strapped, struggling to pay the minimum wage and facing closure by a Government scheme to offer up to 30 hours free childcare a week, experts claim.
Nearly two years on from the introduction the 30 funded hours policy, the National Day Nurseries Association (NDNA) said the shortfall between the cost of delivery and funding paid via local authorities has grown to an average of £2,166 per year per child.
Lancashire is among the areas worst affected by a surge in nursery closures since the policy – which the NDNA said had put “crippling” strain on budgets – was introduced in September 2017.
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The news comes days after the Post revealed maintained nursery schools in Lancashire - those funded via the local authority - face financial collapse if the Government decides not to continue with a special grant they receive.
As well as threatening the future of nurseries, the NDNA said the cost of Government under-funding is also being passed on to parents through higher fees for younger children or charges to parents for extras.
The policy has also increased administrative burdens, with nurseries losing at least one staffing day each week to deal with the new system and help parents register.
A spokesman for Just Childcare, which runs Fern Bank Nursery in Fulwood, Bluebells Nursery in Fulwood, Stonehouse Nursery in Leyland and The Hollies Nursery in Chorley, said: “The 30 hours free childcare scheme has provided a welcome and positive benefit to working parents, but it does represent an ongoing challenge for the childcare industry as a whole.
“Care funding rates vary across the country and have largely stood still for the past few years whilst the industry has seen increases in staffing costs, business rates and other running costs.”
NDNA chief executive Purnima Tanuku said: “It’s about time government woke up to the full cost of delivering their 30 hours ‘free’ childcare policy.
“Nurseries are forced to alter the way they deliver funded hours, by restricting the amount of places they offer, holding back from hiring highly qualified staff or charging parents for extras to make up the funding shortfall. Neither parents nor nurseries want this to happen.
“Doubling the amount of funded childcare from 15 hours to 30 has more than doubled nurseries’ average annual shortfall which, coupled with late payments from local authorities, is seriously undermining their cash flows.
“Adding to these difficulties, nurseries are spending huge amounts of time supporting parents to understand the new system and reconciling payments. This is time which nursery staff should be spending with the children.
“This is a terrible state of affairs in a sector which should be thriving as more children than ever before take up their funded places.”
Anntoinette Bramble, chairwoman of the Local Government Association’s Children and Young People Board, said: “Recent changes to early years provision, including the 30 hours free childcare scheme for working families, are a positive step. However, we have repeatedly raised concerns that the funding rates are insufficient and this is risking both the sustainability of many providers and the quality of provision.
“We have particular concerns around provision for disadvantaged children and those with special educational needs and disabilities if funding rates continue to fall below the cost of delivering services.
“We also have concerns that supplementary funding for maintained nursery schools, which are concentrated in areas of high deprivation and have higher running costs than other nursery provision, ends in 2020 and the government has yet to announce what will happen beyond that. Without a sustainable funding solution, many are likely to close.
“It is vital that early years providers are properly funded to allow them to deliver the high quality childcare that gives children the best start in life.”
There are currently 25,510 children in Lancashire receiving some kind of early years provision, 2,522 of the pupils in 24 maintained nurseries.
A Department for Education spokesperson said: “We know some parents struggle with the cost of childcare, which is why we are spending around £3.5bn on our early education offers this year alone.
“Parents are able to use their free entitlements with a range of provider types, some offering childcare all year round.
“Working parents with children up to the age of 16 can also claim back up to 85 per cent of eligible childcare costs through Universal Credit.
“Over the summer holidays we are also supporting around 50,000 disadvantaged children and their parents with a programme of free activities backed by £9.1m, and just this weekend we announced an extra £2.5m next year to help schools open up their facilities at weekends and over the holidays as part of the School Sport Action Plan.”
Why nurseries are a good option
Deena Billings, head of childcare at Busy Bees, which has a number of nurseries in the Preston and South Ribble area, said: “There are numerous benefits from a child attending nursery, both socially and academically.
“According to studies, children attending nursery at age two develop stronger language skills by age three than those who don’t.
“By attending nursery, children become accustomed to daily routines in a more academic setting which helps them naturally progress to school and by joining a nursery and being among peers helps children develop their social skills and learn how to have positive interactions with each other. This also helps build their independence in time for school.
“Through the experiences provided at nursery, children are supported in developing the necessary skills for moving onto school. Research has shown that attending pre-school education positively impacts a child’s academic skills right up until they leave the education system.”
A spokesman for Fern Bank nursery in Fulwood said: “Attending a nursery can play a key part in the physical, personal, emotional and social development of a child.
“Ten to 15 years ago the childcare industry was seen very much as a babysitting service but now nurseries are recognised for taking a major role in early years education - broadening minds, interest and curiosity; providing a thirst for learning and helping ensure children are ready for the next step in their learning.
“Everything we do at our nursery is centred around the children in our care. Children love children so there’s no better place to explore and develop a child’s social interactions than nursery.
“Mixing with a wide range of children is hugely beneficial, developing emotional skills, improving learning and building confidence.”
An expensive time of year
Families are shelling out £138 a week on holiday-time childcare, a new survey has found.
Coram Family and Childcare said the cost has risen by three per cent since last summer, with substantial gaps in availability for some groups of children.
According to the data, only one in three local authorities in England reported having adequate childcare for all full-time working parents.
Jonathan Broadbery, the National Day Nursery Associations’ Head of Policy and External Relations, said: “Trying to find affordable, accessible childcare during the school holidays is still a huge concern for families.
“In England, government funded places for under fives are technically only for term-time, which can make those financial headaches for working parents worse.
“NDNA’s recent early years workforce survey showed that these childcare providers are struggling to recruit and retain staff to run their normal business, let alone cope with the extra demand that extended holidays bring.
“It’s a serious concern that only a third of councils in England believe they have enough holiday childcare in their area.
“We are seeing funding rates which don’t meet the costs of providing childcare and if this continues nurseries and other providers won’t be sustainable and the picture will get a lot worse.”