Nurseries 'will struggle to offer extra free childcare'

All three- and four-year-olds are entitled to 15 hours free childcare a week.

Many nurseries in England will struggle to provide 30 hours of free pre-school childcare, despite the promise of an extra £1bn, early years providers say.

The Chancellor George Osborne pledged £1bn in the Spending Review for the rise from 15 to 30 hours a week from 2017, boosting rates paid to providers.

But the Pre-School Learning Alliance said research suggested an extra £1.6bn was needed to make the plans viable.

The Treasury based the funding on the findings of its childcare review.

This looked at the costs nurseries faced in providing free childcare to two-, three- and four-year-olds, and the current demand for and supply of places.

Currently, all three- and four-year-olds are entitled to 15 hours free early education a week.

Local authorities are given central government funds to pay for the scheme, which they then pass on to nurseries.

In April 2017, the hourly rates paid by government will be raised to £4.88 per three- and four-year-old child.

'Under-funded'

But the Family and Childcare Trust points out that 30 local authorities already pay their providers more than this.

Pre-School Learning Alliance chief executive Neil Leitch said: "Independent research shows that the figure needed to adequately deliver this programme is £1.6bn. We are at about two-thirds of that funding.

"Even [Childcare Minister] Sam Gyimah told the Education Select Committee that Labour's 25-hour childcare pledge, going from something like 15 hours to 25 hours, would cost an extra £1.5 billion at least'."

"More importantly," Mr Leitch added, "we need to know how the money is going to be distributed.

"However, it is a good thing the government has actually acknowledged that the sector is underfunded. We are grateful that they have recognised that."

Mr Leitch also pointed out that nursery providers would have to pay staff the new National Living Wage of £7.20 an hour from April 2016, a rise of 50p on the current National Minimum Wage.

'Working families'

Family and Childcare Trust chief executive Julia Margo welcomed the extra funding, but added: "It is important to remember that these changes will be implemented at the same time as further cuts to local authority budgets, and in the context of an existing shortage of childcare for working parents in 57% of English local authorities.

"It is crucial that the government phases in the changes over a period of time to give local authorities time to adjust."

Ms Margo said she looked forward to working with the government to make sure working parents got a childcare system that worked for families.

The Treasury would not comment directly on the issues raised.

More places

In his Autumn Statement on Wednesday, the chancellor said: "From 2017, we will fund 30 hours of free childcare for working families with three- and four-year olds.

"To make this affordable, this extra support will now only be available to parents working more than 16 hours a week and with incomes of less than £100,000.

"We will maintain the free childcare we offer to the most disadvantaged two-year-olds.

"And to support nurseries delivering more free places for parents, we'll increase the funding for the sector by £300m."

The details of the funding will be considered along with other issues in a wide school and early years funding consultation to be held in the New Year.