Beset by an ongoing underfunding crisis, just 45 per cent of nurseries in England are likely to extend the number of hours they offer, while the majority of nurseries say they are unsure, according to the National Day Nurseries Association's annual survey.
The NDNA says the funding gap is now the highest ever, with the average nursery losing £34,000 a year, or £1.68 per hour on average for a three- and four-year-old place.
The NDNA warned that ‘tens of thousands’ of parents across the country could struggle to find places unless the Government takes action.
From April the National Living Wage will also push up the average payroll by 10 per cent, the NDNA predicts, with nurseries forced to push up fees for parents.
The 30-hour free childcare offer will mean that the Government will become the private and voluntary sector’s biggest customer for nursery provision for the first time, but ‘equally importantly, the private and voluntary sector is the Government’s biggest delivery partner for the free childcare scheme. Each depends on the other to make the Government’s promise of 30 free hours a success for parents,’ the NDNA report says.
The findings are based on data provided by 500 nursery owners and managers.
NDNA chief executive Purnima Tanuku said, ‘The nursery sector is fully behind the principle of more support for parents. But serious funding shortfalls stand in the way of nurseries getting on board, despite their desire to help families with free childcare.
‘Private, voluntary and independent nurseries deliver most of the Government’s free places, currently 15 hours per week for all three and four-year-olds and some two-year-olds.
‘But the nursery sector is reluctant to commit to offering more free hours when they already make a significant annual loss – an average of £34,000 per nursery – on the funded places they currently provide.’
Julia Margo, chief executive at the Family and Childcare Trust said, 'The availability of expanded free early education for three and four year olds is absolutely crucial to helping parents who work or want to move back into work. In the short-term, the Government needs to make sure childcare providers get adequate funding so they are able to offer these extra hours. But without more radical reforms, the childcare system will not meet the needs of too many parents, children, childcare providers, employers, or the wider economy.'
Councillor Roy Perry, chairman of the Local Government Association’s Children and Young People Board, said, ‘Councils have had to make some difficult decisions about services for pre-school children in the face of previous funding cuts, including the closure of some children’s centres, and so fully support the offer of an extension to free childcare. They also have a duty to ensure there is sufficient provision in their areas.’
But he said that councils should have the freedom to use the £50m of capital funding promised by the Government to extend provision in maintained schools.
‘Councils currently have limited powers over providers, and limited scope to extend provision. For the new scheme to work, powers must be returned to councils to make sure early education offered is of the highest quality.’
He added that the extra £300 million to increase the average hourly rate for providers, along with the introduction of a national early years funding formula, would address the underfunding of providers in some areas that was a consequence of the wide variation in rates paid by Government and the use of the Schools Forum to regulate funding.
‘This funding formula is no longer fit for purpose. This new formula must enable councils to persuade providers to come forward to meet the needs of working parents and provide high quality places for every child that needs one,’ he added.
Commenting, education and childcare minister Sam Gyimah, said, 'The childcare sector is healthy, vibrant and growing. More parents than ever are accessing high-quality free childcare and thanks to our plan to double the offer for working parents, we expect that trend to continue.
'We are backing families and funding the sector, with £1billion extra funding every year by 2020, including £300million annually to increase the national average funding rate, to incentivise and attract providers to deliver the full 30 hour free offer to parents. This extra funding was based on an extensive consultation with the sector and our review into the cost of delivering childcare, the most comprehensive analysis of this market ever.
'During the last Parliament the sector demonstrated its ability to grow with the extension of the free entitlement to disadvantaged two-year-olds and the creation of 230,000 more places since 2009. The NDNA’s survey shows many providers are likely to offer free childcare and thousands of providers and councils also expressed an interest in taking part in our early implementers programme, well in advance of the national roll out.'