A nursery owner in Ipswich has warned that the Government’s rollout of the 30-hour offer could result in the closure of local settings in the town.
The owner of Willow Park Montessori Day Nursery, Sam Sims, has said her setting would lose £17,000 over the next year if they decided to go ahead and offer the additional hours to parents.
Mrs Sims said: “Ipswich has a really good record of childcare, but that is completely at risk by this shake-up of childcare. We are all concerned and have been communicating regularly.
“The government has announced that parents will be able to access 30 hours’ free childcare from September this year. As a sector, we have been informed by the local authority that our hourly rate for this free childcare is £3.87. This does not make this free, because at this rate nearly all providers are making a loss and we are not allowed to charge parents the difference.
“That is the biggest issue. It is being sold as free, but it is not, as we are having to make up the difference and can’t charge that difference to parents.
“We all provide high quality care for children and this is now going to be impossible. The result will be that some providers will not be providing the extra 15 hours – and we already provide 15 at a loss – and Suffolk County Council will have difficulty in providing the places the government requires, or it will be settings closing as they cannot earn enough money to be sustainable.”
In his Budget this month, Chancellor Philip Hammond announced that, from September, eligible families of three and four-year-old children would be entitled to 30 ‘free’ hours a week of childcare in term time.
It is not compulsory for early years settings to offer the 30 hours, but many providers fear that, if they don’t, they’ll lose parents to competitors who are offering the additional hours.
Mrs Sims added: “Most providers are offering 15 hours already. If I said to my parents from September I am now offering 30 hours, that means that, if they were to take those full 30 hours, they would pay the nursery nothing. But the cost for us offering those 30 hours is higher than the cost we are getting back from the government.
“It is a choice. At the moment I am going to say no. The other side is, people will say yes, but it is not sustainable and there is a high risk you will have closures of settings because you can’t sustain it.”
The director for children and young people at Suffolk County Council, Sue Cook, said: “It is disappointing that Suffolk County Council is one of just 25% of authorities in the country facing a reduction in funding as a result of the government’s new Early Years National Funding Formula. The reform will reduce the hourly rate of funding to providers by up to 9.5% or 37 pence.
“Following a consultation with early years providers and the schools forum Suffolk County Council has taken the decision to offer Early Years providers the highest hourly base rate possible of £3.87 plus a supplement for deprivation of £210.
“However creatively we use the reduced funding, the reality is that schools, nurseries, playgroups and childminders will see a reduction in funding from April 1 2017.
“We are disappointed that the reform has not addressed the significant inequality of funding across the country and our concern is that this will serve to further divide authorities between those that have gained and those that have lost, as a result of the reform. Suffolk County Council will continue to lobby for fairer funding for children in Suffolk.”
Elsewhere, the campaign group Champagne Nurseries on Lemonade Funding has invited its 13,000 members to provide information on settings which are known to have closed their doors ahead of the 30-hour rollout.
It is still in the process of compiling the data from different areas of the country, but found that 306 early years providers had resigned to Ofsted and the LA in Oxfordshire between January 2016 – February 2017.
One childcare provider from Hampshire posted in the campaign group’s Facebook page on 24th March:
“That’s it…after 10 years I have told my parents I will be closing my doors at the end of August. On to pastures new where I won’t have the stresses and strains of this absolute mess. I am not going to be responsible for the mess these poor children are entering whilst running at a loss. There are NO winners. The government will realise soon enough…”