Providers warn they cannot subsidise Lib Dem childcare expansion plans

On the agenda at the Lib Dem conference this week is a policy paper calling for a wider expansion of the government’s free childcare programme so that one-year-olds get 10 free hours of childcare a week.

In addition, all two-year-olds, rather than just the poorest, would get 15 hours free childcare, and the free entitlement for three-year-olds would increase from its present level of 15 hours a week to 20.

The party believes the plan would encourage more women to return to work and provide a boost to the economy that would offset the costs involved.

But Purnima Tanuku, chief executive of the National Day Nurseries Association, said: “Proper costing must be done before anything else. If that is not right there is real concern it could inflate fees and make funded places and the sector itself unsustainable.”

She also called on the coalition government to ensure that “problems inherent in the current system must be resolved” before any expansion is considered. This includes improving the hourly rate offered to nurseries that offer the places. Under the current payment structure nurseries are having to push up their fees for hours not covered to recoup their losses.

She added: “We know from our members that there are already problems with the hourly rate they receive for the funded places. A majority report it as being less than the cost of the place itself so they are effectively subsidising the system. Whilst any losses on free places push up fees for the hours parents pay for.”