On Monday, families with children aged nine months to four years became eligible for 30 hours a week of government-funded childcare during term time. While the policy was designed to ease financial pressure, experts say it fails to cover the true cost of delivering quality care.
Nurseries Forced to Raise Fees
A survey by the Early Years Alliance (EYA) found that 94% of childcare providers plan to increase fees for families who are not eligible for free hours. In addition, 97% expect to introduce or raise charges for optional extras, such as meals, trips and extended care hours.
Neil Leitch, Chief Executive of the EYA, said nurseries are under intense financial strain:
“Providers are being forced to hike fees just to survive. The government has expanded free hours, but the funding does not meet real costs.”
Rachel Grocott, from the charity Pregnant Then Screwed, agreed that the policy “absolutely has not fixed childcare in England,” warning that parents face a scramble for limited spaces.
“We hear from mothers delaying promotions to remain eligible for childcare support and parents returning to work earlier than planned just to secure a place,” she said.
Concerns Over Closures and Staff Shortages
In a letter to Education Secretary Bridget Phillipson, 27 organisations representing parents, nurseries and childcare providers warned that the government’s flagship childcare plans risk failing due to underfunding.
Key findings from recent surveys show:
- 44% of providers cannot meet demand this September
- One in six nurseries have already cut funded places
- 20% more are expected to follow
- One in ten childcare providers say they may close permanently within two years
The groups called on the Department for Education to properly fund increased national insurance contributions, improve staff pay, and invest in training to prevent a workforce crisis.
Government Response
The Department for Education defended the policy, claiming the report “misrepresents the positive impact” of free childcare. A spokesperson said:
“Hundreds of thousands of families can now save up to £7,500 per year per child. Over nine in ten parents have secured one of their top three preferred providers, and more than one in four have been able to increase their working hours.”
The government is investing over £8 billion in childcare this year and announced a £4,500 tax-free bonus to attract teachers to nurseries in disadvantaged areas. However, providers argue that April’s national insurance rise has already added £1.2 million to wage bills in these same areas, forcing 11 nurseries to close.
The Bigger Picture
Industry experts warn that without urgent investment, England risks a childcare crisis similar to South Korea, where economic pressures have led to plummeting birth rates. Some nurseries report that parents are joining waiting lists two years in advance to secure places for children who are not yet born.
Despite the government’s promises, the widening gap between funding and operational costs has left families caught between soaring fees and limited availability.
