A Preston nursery has closed its doors after 13 years.
The Rosy Apple Childcare nursery in Ribbleton Hall Drive, Ribbleton closed its doors last Friday.
The centre, known as Little Achievers @ Ribbleton Children's Centre, opened in 2006 and was the first in the city to be run by a member of the private Voluntary and Independent (PVI) sector.
A nursery spokesman said all children and staff who have indicated they wish to transfer within the business will have a place at their sister nursery, Little Achievers Day Nursery, in Chatburn Road, Ribbleton.
They added: "The owner, directors and staff team are devastated at the action we have had to take.
"Despite our great work, the government no longer pays us enough to continue to provide the Free Entitlement at our settings.
"This shortfall in the Government Funding in conjunction with high rental and service costs required by Lancashire County Council is now preventing us from keeping our nursery sustainable – along with other rising costs.
"Our other nurseries in Preston are owned by the company and therefor do not have rental or service charges at the level required by Lancashire."
All three to four-year-olds in England can get 570 free hours of care every year under the Government's Free Entitlement scheme.
It’s usually taken as 15 hours a week for 38 weeks of the year.