The findings, from a survey by the National Day Nurseries Association (NDNA) with ITV News, also suggest that around one in six nurseries will not offer the extended entitlement at all because of inadequate hourly funding rates.
Although the vast majority of nurseries in the survey said that they will be offering the 30 hours (85 per cent) when it starts next month, most also said that they will be charging parents for extras or limiting places.
Many providers said that they could only offer the 30 hours as a ‘stretched’ entitlement throughout the year (51 weeks), at 20 hours a week.
More than half of the nurseries that responded (54 per cent) said that they would be restricting the number of places on offer, with some offering them to just one or two children.
The survey also highlights regional variations. More respondents in East Midlands (91 per cent), East of England (89 per cent), and the North East (88 per cent) were planning to offer the 30 hours.
Twenty-three per cent of nurseries in the North West of England and 19 per cent in Outer London said that they would not be offering the places.
There were 1,147 responses to the NDNA survey, which was carried out online for a week in July.
Many nurseries responding to the survey said that they felt that they had no choice but to offer the 30 hours despite difficulties.
The survey found that 15 per cent of respondents will not be offering the 30 hours due to inadequate funding.
Purnima Tanuku, chief executive of the NDNA, said the latest research echoed a survey earlier this year by the organisation, which showed that one in five nurseries were not planning to offer 30 hours because they could not afford to.
‘We have lobbied the Government hard since 30 hours was first committed to by Government in May 2015 to make sure sufficient funding was put in place to make this a success,’ she said.
‘This has simply not happened, average increases were just 40p per hour from previous research so now nurseries are put in an extremely difficult position. If they go ahead with the scheme, they risk their sustainability. If they don’t, they risk losing business as parents vote with their feet.
‘There is a real danger that there simply won’t be enough places to meet demand and thousands of parents will end up disappointed.’
Department for Education guidance allows settings to charge for extras, but says that they cannot be a condition of accessing a place and providers must offer alternatives to parents who do not wish to pay.
Mrs Tanuku added, ‘We have offered a solution, which is to allow nurseries to charge parents for meals and other services as a condition of a place. Businesses cannot be run on voluntary payments and nurseries are no different.
‘The majority of nurseries who answered our survey say they can only do so by charging parents. Parents are still benefiting from childcare at vastly reduced cost to regular fees.
‘Until there is sufficient investment in this scheme, these hours are not going to be free, they are subsidised.’
Nicola Murphy, owner of Early Days Nursery School in Ipsden, Oxfordshire, has decided not to offer the 30 hours, because she says 'the stark reality' is that the £4.01 hourly rate is not viable for her business.
'No parent has left or reacted negatively to our decision - in fact they understand fully the economics of the situation,' she said. 'People in this area have to pay over £10 an hour to get their dogs walked, yet we are supposed to look after a child for less than half of that.'
Minister for children and families Robert Goodwill said, 'Across the country we are already delivering the 30 hour offer with great success – over 15,000 children are benefitting from a place and our evaluation shows that providers are committed to offering this to parents.
'In York, one of the 12 areas which has been piloting the scheme since last September, 100 per cent of nurseries offering the original 15 hours are now also offering 30 hours. In Northumberland, 100 per cent of providers have signed up to deliver the 30 hours. We are also hearing similar results from the other early implementer areas.
'This is backed up by our record investment in the sector – £6 billion a year by 2020, with £1 billion more going to fund the free entitlements.
'We have always been clear that our 30 hours funding is expected to cover the cost of delivering free childcare. If providers need to charge for extras, such as meals or activities, this cannot be a condition of a child accessing their place.'
Carol Jane Montessori Nursery School, Enfield
Carol Medcalf (pictured below), owner of Carol Jane Montessori Nursery School in Enfield has decided not to offer the 30 hours
‘The word “free” suggests the consumer does not have to pay and that someone else has agreed to cover the cost. In regard to “30 free hours”, parents are to receive their childcare at no cost to them - the Government has agreed to pay, but on a one-size fits all basis.
‘In practice this is never going to work, economics alone suggest this is impractical and doomed to failure. Every setting has different overheads and business models. If I ran my setting for the free entitlement alone I would have to make so many cuts that I would rather not offer the service.
‘For me to take part, the Government needs to change the word “free” to “susidised”, I then can’t think of a reason why any early years setting would not take part. The Government would be advertising the “reality”, parents would know what to expect and nurseries could charge according to their cost. Children would receive the quality they deserve.
‘I do understand that the Government may be worried that nurseries would increase fees but most people do not choose childcare as a vocation to get rich quick, we simply need to cover our costs to provide the right kind of childcare. We are all in business in a competitive market - charge too much and parents will choose someone else, allow us to charge a realistic cost to run our nurseries as we see fit and parents are offered a choice.
‘I also do understand that we can charge for certain services and ask parents to pay for these, but if you advertise “free”, parents do and should expect “free”. If they choose not to take up additional services, which they are totally entitled to refuse, the shortfall cannot then be made up and the setting will suffer the financial loss.’