The nurseries say that the funding they receive for the free entitlement does not cover their costs, and that Hertfordshire County Council will not allow any loopholes that would enable them to charge for additional services and extracurricular activities.
Eight nurseries and pre-schools attended a meeting at the end of November to discuss how they will be affected by the new Code of Practice.
Toni Finkel, co-proprietor of Rexton House Nursery School, a chain with four settings in Radlett, Shenley and Aldenham, said, 'For the settings that attended the meeting, the funding shortfall for the free entitlement is between £3.50 per child per day and £14 per child per day. We are talking about a loss of around £40,000 per year if you have 20 children using the free entitlement. At Rexton House Nursery all our staff are well qualified, they have EYP or Qualified Teacher Status, or they are degree level. We would have to lose two members of staff to cope with the loss we would make because of the free entitlement.'
She added, 'Our parents are quite happy to pay the difference because they don't want to lose the quality. All this is going to do is make the quality of childcare worse - how are settings going to be able to pay graduates?'
Rivka Bick, early years teacher at Little Bicks Nursery in Borehamwood, warned that her setting may also be forced to pull out.
She said, 'If we continue in this scheme receiving NEG funding alone, then we would have to make drastic cuts. We would have to have a one-to-eight ratio instead of a one-to-four ratio. There would be no money for the future training of our staff.'
Last week, Early Years Childcare, a nursery chain offering more than 650 places, said it was considering pulling its nine nurseries out of the free entitlement if underfunding continues (News, 9 December).
Ms Finkel invited any nurseries interested in joining a campaign against the Code of Practice to e-mail firstname.lastname@example.org.