Nurseries keen to offer places for two-year-olds, but worry about the cost

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Around two-thirds of nurseries want to offer places for disadvantaged two-year-olds, a survey by the National Day Nurseries Association suggests, but many have misgivings about whether the funding would cover their costs.


On average nurseries said they expected to offer ten places at their setting for two-year-olds.

Sixty-three per cent of nurseries said they were definitely or likely to get involved. This included 37 per cent of nurseries who are already taking part in the scheme.

The findings are based on feedback from 131 nurseries surveyed last month at NDNA member events in the North and Midlands and online.

Forty-three per cent of those questioned said that they would need support to get involved, such as capital funding to increase capacity and training for working with children with special educational or additional needs.

The survey also reveals widespread concern about the levels of funding. Given many nurseries’ experiences of shortfalls in funding for the free entitlement offer for three-and-four-year-olds, the NDNA said that the sector was wary of future funding levels for two-year-old places once the pilot scheme ends.

According to the survey, a quarter of nurseries taking part in the two-year-old pilot are already receiving less in funding than it costs them to provide the places.

Of those nurseries that said they did not receive sufficient funding to cover the costs of two-year-olds places, underfunding ranges from 35 pence to £4 an hour.

The NDNA said it was essential that as the scheme for two-year-olds expands, funding rates are protected and adequate funding reaches the frontline in private and voluntary nurseries, so that it does not stop nurseries wanting to take part in the scheme.

Some nurseries may also need capital funding to expand, refurbish and equip their settings to meet the need for more places, and the NDNA said that Government schemes, such as the National Loan Guarantee Scheme should be promoted to childcare businesses.

NDNA chief executive Purnima Tanuku said, ‘Nurseries know the benefit that funded places will bring to two-year-olds and most are enthusiastic to offer places, if the conditions are right.

‘It will be vital to ensure that delivering places is financially viable for providers, with the right level of funding and measures to keep costs down. We also need action to address nurseries’ support needs, including practice with two year olds, operations and business planning.’

NDNA also said that private and voluntary nurseries should be able to recover VAT on new capital investment in line with maintained providers and that a scheme in Wales to allow nurseries to recover business rates should be extended throughout the UK.

Around half of nurseries surveyed had not yet heard from their local authority about plans for two-year-old places for September.

Ms Tanuku added, ‘We need prompt action now to address the challenges, grow confidence in the initiative and encourage nurseries to play their part  to ensure we can scale up to deliver for these 260,000 children in less than three years time.’


Tender Years Day Nursery, Solihull

Owner and manager Lisa Whitehouse offers on average five places for two-year-olds, but says this is to meet the demand in the area, not because the nursery limits the number of places.

The 66-place nursery was started 22 years ago by Lisa’s mother Mary Meechan and is well established in the community with links to children’s centres.`

Many of the two-year-olds entitled to the free places typically have speech and language delays, as well as challenging family circumstances.

The nursery is taking part in the scheme because Lisa says offering a place to a child at two ‘really makes a difference, particularly for children with additional needs’ and really helps parents, who she says often don’t know who to turn to.

‘Children either make really good progress or they are given an appropriate package of support to help them transition into school. The impact for these families and children is massive.’

Lisa estimates that around 90 per cent of parents that use the nursery are working, which means that the nursery can afford to take the funded children. She acknowledges that it would be harder for nurseries that rely more on funding alone to offer two-year-old places.

‘Offering the two-year-old places could be a double-edged sword. It’s important to talk about the cost of providing quality childcare, because if you had a lot of two-year-old places it could be a barrier to your sustainability.’

Lisa’s nursery is rated good by Ofsted and employs well-qualified staff, including a qualified teacher, an Early Years Professional and staff with foundation degrees in early years.

‘The Government is pushing for highly-qualified, better-paid staff, but it doesn’t tally with the funding.’
She adds, ‘It does take a lot of time and effort to make the placements successful. There’s a danger, I think, that if the funding is inadequate a lot of nurseries will snub it and think it’s more effort than it’s worth.’

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