'Free' childcare offer will lead to more nursery closures, finds research

A survey carried out by campaign group Pregnant Then Screwed among 266 childcare providers found 92 per cent said the 30-hour offer, introduced in September 2017 to three- and four-year-olds of working parents, was causing them financial challenges.

The poll revealed almost all of the providers questioned (96 per cent) said the government subsidy to operate the funded childcare offer did not cover their costs.

This financial strain placed upon childcare providers meant 22 per cent of those surveyed said they did not believe they would still be open this time next year.

Further findings show nearly three quarters (71 per cent) of providers are having problems recruiting new staff, with 91 per cent reporting a lack of skilled childcare workers in the pool.

The survey also revealed around a quarter (24 per cent) of providers felt forced to use supply staff from agencies on a regular basis.

• Two-year-old offer: more funding and greater awareness is crucial
• Analysis: 'Invest in the childcare workforce to get best outcomes for children'
• Analysis: Childcare funding in spotlight

Furthermore, around 60 per cent of providers said they thought childcare workers were overworked and 90 per cent felt they were badly paid.

The campaign group said the findings reflected the "turmoil" being experienced by the UK's childcare sector, recently ranked by the Organisation for Economic Co-operation and Development as the second most expensive childcare in the world.

Joeli Brearley, the group's founder, said its research among childcare providers showed the government's approach to childcare was "not working".

"The offer of 30 free hours sounds good on paper, but in reality, it is manifestly inadequate for the scope required," she said.

Brearley said mothers entitled to only nine months' paid maternity leave were being forced to stay at home or "bear the brunt" of the high cost of childcare.

"With the government imposing 30 ‘free' hours on childcare providers from three years onwards for just 38 weeks of the year, providers are recouping costs from younger years.

"This necessary action to stay in business is the key reason behind mothers being unable to return to work because of the high costs, further adding to the motherhood penalty and gender pay gap," she said.

Responding to the survey, the Early Years Alliance said its findings "paint a grim picture" of the sector's future, highlighting thousands of childcare providers that had already had to close.

Neil Leitch, the alliance's chief executive, said: "The reasons behind these closures are rarely complicated.

"I've spoken to hundreds of high-quality providers, all of them cherished by local families that have simply been unable to cope with the financial burden so-called ‘free' childcare places on them.

"Many more continue to survive only because parents can afford to subsidise supposedly funded hours by paying higher fees and voluntary charges.

"The hard truth is that this is unavoidable when the gap between the true cost of delivering those hours and the funding received stands at two thirds of a billion pounds and is growing all the time," he said.

A Coram survey of local authorities in February revealed the 30-hour offer is leaving early years providers struggling to cope financially.

It found 36 per cent of councils felt the government-funded entitlement was having a negative impact on the financial sustainability of childcare providers.