Nurseries say subsidies aren't enough to survive

Providers say an expansion of free childcare will put more pressure on them

Nursery owners say that the expansion of free childcare across England from 1 September could put even more pressure on providers.

Children aged from nine months to four years old are now eligible for 30 hours of free nursery care during term time, potentially saving parents £7,500 a year per child.

But there are serious concerns about the number of staff and places at nurseries, which are already said to be widely struggling financially.

Helen Hazell, who runs the Olive Tree Nursery in Bridgwater, Somerset, told the BBC the government payments were not enough to support the costs of running a nursery, forcing providers to "be creative just to keep the doors open".

Ms Hazell said government payments were particularly insufficient for children aged three and four – who have been eligible for some free childcare since 2017.

Olive Tree Nursery is losing nearly £250,000 a year for this age group, she said.

Many nurseries in similar situations are having to increase the cost of unfunded hours to balance the books.

Dr Joanna Clifton-Sprigg, who researches childcare provision at the University of Bath, said the childcare rollout was likely to increase demand for places and drive up prices for unfunded hours because of increased competition.

Ms Hazell said she was reducing her pre-school spaces this year – for children aged three and four – from 24 to 16.

'It's heartbreaking'

The cost of a full-time place for three and four-year-olds has increased by 10% in England, Scotland and Wales, with the average annual cost now at £6,600.

Ms Hazell said: "There are going to be issues with families being able to find the childcare out there.

"For many [nurseries], they haven't got the means or the reserves to keep going and it's heartbreaking when, every time I look around, there are settings closing just purely because the funding isn't keeping pace with real-life costs."

Her views were echoed by Clare Goby, owner of Sunbeams Playgroup in Clevedon, Somerset.

She said the extra funding was "helpful" for parents. But she criticised government restrictions on top-up payments charged to parents for the free childcare hours, which help nurseries to break even.

"Generally, across the board, I think all of us are struggling to keep afloat," she said.

"The actual funding itself doesn't cover the costs that we have."

Mary takes her daughter to nursery two days a week – and is now going to raise that to three thanks to the new support

Mary, a mother-of-one from Wiltshire, said she was "very much excited" for the new childcare support.

She takes her daughter to nursery two days a week and is about to raise that to three.

"Childcare has enabled me to return to work and increase my hours as a project manager, saving us around £300 a month in nursery fees and £30 a week in fuel costs for my elderly parents who used to help out," she said.

"My daughter is thriving in her forest school nursery, and I've gained time to focus on work, errands, and myself."

The government says the scheme is part of a record investment that will rise to £9bn annually by 2026, with a £37m investment in 300 new school-based nurseries to increase the number places.

Education Secretary Bridget Phillipson said the policy was designed to give children "the best start in life", and provide a "huge boost" to the economy.

"My vision for early years goes beyond this milestone," she said.

"I want access to high-quality early years for every single family that needs it, without strings and without unfair charges.

"Over the next few years, that is my commitment to parents."