From September, three- and four-year-olds of working parents in England will be eligible for 30 hours free childcare in term time. In addition to this, local authorities will commence the new funding rates under the Early Years National Funding Formula from April (for the existing 15 hours) and September (for the additional 15 hours).

The planned rollout of the Government’s 30-hour offer and EYNFF has thrown the childcare sector into turmoil, with many providers already closing due to mounting financial pressure. But this was entirely predictable, highlighted by such surveys as the one conducted by NAHT in 2015. This report found that 54% of respondents didn’t have the capacity to increase the number of hours of nursery education they offer and 40% said that offering this to parents would make their provision less sustainable.

This is an incredibly worrying time for early years settings. So, ahead of the introduction of the 30-hour entitlement, we’ve looked at some of the ways providers can plan and prepare themselves.

1. Find out which parents are going to be eligible

Before the 30 hours free childcare is rolled out in September, you need to get an idea of exactly how many parents in your setting this could affect. Using a letter and short questionnaire, you need to ask:

• If parents will be eligible for the 30 hours
• If they are eligible, whether they plan to take it up
• Whether they’ll continue to use your setting if you choose not to offer it

2. Find out what financial impact this will have

In response to the questionnaire you send out to parents, you’ll be able to get a good idea of how many are likely to want to take up the full 30 hours in September. Once you also know what the unit cost per child will be from the local authority (as not all local authorities have disclosed this yet), you can start to crunch numbers and make an informed decision about the next steps you’ll take.

3. Decide whether you’ll limit the number of places

Ask yourself whether it makes financial sense to limit the number of places you offer for the additional 15 hours. Think carefully about the sustainability of your setting over the long term. For example, if you take on a lot of 2-year-olds in September, then the 30 hours may not have a noticeable effect on your business. But come next year, when these children all turn 3 and their parents want to take up the offer, how sustainable will this be? If you do decide to limit the number of 30-hour places you offer, you’ll need a fair way to manage this.

4. Remember you can decline to offer the 30 hours

As a childcare provider, you don’t have to offer the 30 hours childcare to eligible parents. In fact, you’re well within your rights to simply say ‘no’! However, you need to think about whether parents will vote with their feet and take their business to one of your competitors who is offering the full 30 hours. That said, if very few parents at your setting are likely to be eligible for the 30 hours from September and beyond, then declining to offer this could be the best financial decision for your business.

5. Ask for contributions from parents

Before you explore ways to supplement your income, you need to know your provider agreement from your local authority inside and out. This will enable you to find out exactly what you can and can’t charge for. For example, you may be able to ask parents for a contribution towards the cost of nappies and additional services such as meals or yoga classes. Don’t break the rules, but think outside the box for ways you can help your setting financially.

With the rollout of the Government’s 30 hours just around the corner, there is plenty you can do to plan and prepare your setting so that it remains financially sustainable. Getting the wheels in motion now to find out which parents are eligible and how this will impact your setting is a great start and will help you make informed decisions about what to do next.

Need an easier way to manage the admin side of running your setting? Speak to our team about Abacus, our award-winning nursery software.