Findings from the National Day Nurseries Association (NDNA) annual survey of its UK members reveals nurseries are losing £604 annually for each two-year-old place provided under the free childcare scheme. On average, nurseries provide 11 places to disadvantaged children making the average loss £6,644.
The survey also shows that those providers offering free two-year-old places receive an average hourly rate of £4.77 from local authorities, £1.06 per hour lower than it costs to deliver the place.
Last September, the 130,000 most disadvantaged two-year-olds became entitled to receive up to 15 hours of free childcare from a local nursery.
But the NDNA report suggests underfunding of the free childcare offer is making it “impossible” for some nurseries to provide more places under the scheme. Those that are providing places are being forced to charge higher fees for childcare not covered by the free scheme to offset losses from council underfunding.
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