Press release:

One in five full daycare nurseries don’t plan to deliver the Government’s 30 “free” hours, leaving 50,000* children without places, says National Day Nurseries Association (NDNA).

This equates to the number of pre-school three and four-year-olds in the whole of Greater Manchester ** – and the figure could be much higher as funding uncertainty means many more nurseries still don’t know whether to opt in.

Today’s news could be a huge blow to expanded childcare plans as full daycare is the largest part of the nursery sector, taking the greatest numbers of funded three year olds and best-placed to serve parents in 9-5 type jobs.

NDNA’s Annual Nursery Survey for England findings, published today (18 April) follow Department for Education figures indicating that just 44% of school nurseries are likely offer 30 hours and the Preschool Learning Alliance’s recent announcement that only 44% of settings, mainly playgroups and childminders, aim to do so.

NDNA also found that only 44% of daycare providers say they will participate and a fifth say they are unlikely to, or definitely won’t. A total of 35% still don’t know, just five months ahead of rollout.

The survey reveals a nursery sector with plummeting confidence and real fears about sustainability when faced with inadequate funding, soaring costs and recruitment problems.

Fees are set to increase for parents who already shoulder some of the biggest childcare costs in Europe and fewer places will be available for disadvantaged two-year-olds, who most benefit from quality early years education.

Purnima Tanuku OBE, Chief Executive of NDNA, said: “Our findings are significant as they concern full daycare settings, the largest part of the nursery sector, who provide more places than schools or playgroups.

“There is no such thing as ‘free’ childcare – parents, nurseries and their staff are all paying for this.

“It is time the Government stopped promising parents ‘free’ childcare hours unless they are prepared to invest the money needed. This manifesto promise is in real danger of failure.”

Purnima continued: “One Government policy, the National Living Wage, is directly impacting on the delivery of another Government policy, ‘free’ childcare, because wages are increasing but with no prospect of more funding.

“Because the 30 ‘free’ hours policy is underfunded, many nurseries told us they will turn their backs on this expansion. Our survey shows this could lead to at least 50,000 children missing out on £250 million worth of childcare.

She added: “The Government is relying on the private and voluntary sector to meet expected high demand. If there is no more money, the Department for Education needs to give nurseries more flexibility in delivering these places.

“This includes allowing them to make mandatory charges to parents for extras over and above childcare, such as meals, activities and trips out. The DfE acknowledges that nurseries will need to make optional charges, but you can’t run a sustainable nursery business on voluntary charges.

“Without this lifeline, the policy will not be a success for all those who are entitled to it and nurseries fear they will get into financial difficulties and could even go out of business.

“Parents will get help with any extra charges through tax credits and universal credits for low income families and the soon to be launched Tax Free Childcare scheme.”

NDNA’s annual nursery survey 2017 found that:

  • One fifth of nurseries are unlikely or definitely won’t offer 30 hours and only 44% say they will participate, 35% don’t know just five months ahead of rollout
  • 85% of nurseries are underfunded, with the average loss per child per year £958 for 15 hours funded childcare
  • More nurseries (83%) than in previous years plan to increase their fees, with the average rise being 4.5%
  • The number of nurseries expecting to make a loss has almost doubled since 2016 from 9% to 17% – only 43% expect to make a profit or surplus
  • Increasing staff wages is the single biggest challenge nurseries face, with payrolls due to rise by a further 7% average
  • More nurseries expect to be forced to employ younger and less qualified staff to reduce these staffing bills
  • Business rates are going up for the majority of nurseries, with the average rateable value rising by a quarter
  • Rising costs will increase the funding gap, as rates are frozen until 2020
  • Inadequate funding and pressure to deliver 30 hours will threaten free places for disadvantaged two-year-olds, with 10% reducing two-year-old places.

The survey, which took place in January and February, elicited responses from 788 nurseries across England.

Purnima continued: “If the Government cannot afford to do this, we ask them to either seriously rethink this ‘free’ childcare policy or delay the full roll-out for in-depth analysis to be done on the early adopter pilot schemes, currently under way.

“Until the summer, we won’t know which aspects of the pilot schemes have worked and which haven’t. That will be too late to put any changes in place.

“Rather than forcing through this policy at the expense of quality and nursery sustainability, we strongly urge the Government to listen to the sector which says nurseries cannot afford to deliver this in its current form.”

NDNA has offered a number of solutions which include:

  • Require parents to pay additional fees as a condition of a funded place
  • Increase funding in line with inflation and rising costs such as the National Living Wage
  • Nurseries to be exempt from business rates
  • Parents to have an online Childcare Passport for each child pooling all funding streams so they can pay their choice of provider directly.

Explanation of figures:

*Caroline Dinenage MP response to Parliamentary question 13 February 2017: DfE estimate  390,000 children will qualify for 30 hours and 60% places to be delivered by private and voluntary nurseries = 234,000 children. 22% unlikely to or definitely won’t deliver 30 hours = 51,480 children

**Greater Manchester as an area has a total population of 2.7 million – 1.8% of the English population roughly includes all 3 year olds and half of 4 year olds who can receive funded places = 50,000 children


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