A study by the Federation of Small Businesses found that small providers are facing significant challenges due to "increasing and unsustainable" business costs and a lack of government funding to provide free childcare for three- and four-year-olds.
It has called for the introduction of a new 100 per cent business rate relief scheme for childcare providers in England to reflect increasing cost pressures on the sector and for government to urgently review the amount of funding given to local authorities to fund the 30 hours entitlement.
In a report examining the threats to small childcare businesses, the FSB said rising costs and funding shortfalls have left many providers struggling to stay afloat.
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