The finding has prompted warnings that nurseries could be reaching a crunch point. Research company Laing & Buisson questioned 6,000 day nurseries at the start of this year and found they were getting just 34p more for every two-and-a-half hours of free childcare provision than in 2007, equivalent to a 4.3 per cent increase.
But wage, tax, utility and other bills have outstripped the rise, leaving nurseries under pressure to find ways to make up the shortfall.
Philip Blackburn, senior economist at Laing & Buisson, said: "The majority of settings report they make a loss from providing free sessions for three- and four-year-olds, and it is difficult to see how this position can continue.
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