Nursery owner says free childcare expansion 'unsustainable'

Katryn Bennett owns and manages Acorn Nursery in Somerset, where she employs 19 people

A nursery owner said expanding free childcare to parents of two-year-olds will "significantly impact" places already struggling to stay open.

Katryn Bennett, who owns Acorn Nursery in Somerton, Somerset, said it has become "harder to break even let alone stay sustainable or profitable".

The government has promised working parents of two-year-olds in England 15 hours of free care a week from April.

A petition set up by Ms Bennett has been signed by 23,867 people.

The change.org petition has gathered the signatures in just five weeks.

Ms Bennett, who has been in the industry for 25 years and employs 19 members of staff, said the hourly funded rate has gone up 5% with the minimum wage increasing between 10-21%.

She said the government pledging 30 hours of free childcare for all under-fives from September 2025 - on top of the changes for funding this year, with all children eligible for 15 hours free childcare from September - will further increase the burden on nurseries.

Ms Bennett said the government changes will increase the burden on nurseries and in turn, impact on the availability of childcare

She said: "It will have a huge impact on whether we can stay sustainable or not and keeping people in jobs and providing that care which is so essential for the early years."

"There is a gap between what it costs us as a provider and what we receive from the government."

Ms Bennett says she has 90 children on her books with 40% currently receiving 15 free hours. This figure will rise when two-year-olds are included from April.

She explained that the government subsidy is £5.25, but there is a funding gap as the nursery needs between £7.50 - £8 per hour to break even.

Ms Bennett said the response to her petition had both "surprised and delighted" her

"We've been subsidising it for many years now and with the expansion going into other years… it is not sustainable without adding a [further] charge on top," she added.

"It's a sector that is going to dwindle if something is not done very quickly."

Ms Bennett said it was "insulting" that people like her and her staff are not consulted by the government to see if proposed changes will work.

A spokesperson for the Department for Education said: "We are confident in the strength of our childcare market to deliver the largest-ever expansion in childcare in England's history, and we are already seeing providers looking to expand their placements across the country.

"The Institute for Fiscal Studies has independently reported that the average funding rates for two-year-olds and under two's paid by government from April 2024 are projected to be substantially higher than the market rate paid by parents last year.

"And we have committed to further increases to provider rates for the next two years backed by an estimated £500 million."

Ms Bennett said continuing the standard of care they currently offer is "so essential for the early years"

Ms Bennett said she had received limited feedback from other nurseries, but had been "surprised and delighted" with the response to her petition.

She said she hopes the support will "start to make a difference".

"The government has made it look really rosy to parents and everyone else but it's simply not the reality - there is simply not enough money for us to run the way we would like to."