You're probably aware that all three and four-year-olds in England can access government-funded childcare for 15 hours per week. But you may not know that the money that the government pays providers – nurseries, pre-schools and childminders – to offer these places has, for many years, been far less than the cost of delivery, leaving those of us working in the sector struggling to stay afloat.
In fact, a few years ago, an independent report commissioned by early years organisation the Pre-school Learning Alliance found that government funding only covered the cost of four out of every five children accessing so-called free childcare – leaving providers to make up the shortfall. Often, that has meant higher fees for parents – which is why childcare costs in this country are so high.
When the 30-hour offer comes in this September, things are only going to get more difficult. According to a recent survey by the Alliance, as a result of this underfunding, less than half of providers are currently planning to offer the 30-hours, while a quarter fear that delivering 30-hours places could put them out of business.
I run a small, rural private daycare nursery in Somerset. We are purpose-built to meet all needs of children in our care, and run an on-site Forest School as well as caring for our own sheep and chickens. And we are not going to offer the 30 hours.
Our financial situation has become more and more difficult over recent years as we have had to negotiate an ever-dwindling funding pot. As a result of underfunding and government policy changes, since 2010, we have suffered losses of £16,000 per annum. So why would we sign up to the 30-hour scheme and risk making these losses even worse?
Our business costs do not remain static: we have to meet increases to minimum wage, to business rates, and to domestic services and overheads. Yet government funding has not risen to match this.
This means that our staff haven't had a real-term pay rise for four years, with three practitioners now on minimum wage (as this has risen to match their existing wages). Our manager is paid less than an unskilled labourer, while I, the owner, worked a 45-hour week until 2015/16 for just £6,200 – this amounts to £3.43 per hour.
We have now been forced to reduce what we can offer to retain quality, going from a 45-hour week, to just 24: three eight-hour days per week, term-time only. This is the only way we can reduce our overheads in the hope of rebuilding the business.
If we are to survive, the government needs to realise its monumental error in promoting the childcare offer as free - when in reality, providers are having to plug a huge funding gap.
If the 'free childcare' offer is truly free, then why am I, as the owner of a childcare business, having to put in £6000 of my own personal savings just to survive the autumn term? This is the only way I can ensure staff get paid, though often at minimum wage and less in my own case. This is the only way that I can cover the shortfall for parents so that they can access the 15 funded hours.
We simply cannot afford to offer 30 hours of funded childcare. If we did, we would close within two terms.
We have made every effort to fulfill the government's pledges to parents: quality staff, quality environment, home-cooked meals and an incredible outdoor learning provision. But now we are left feeling like the government has essentially high-jacked our business.
As members of the 'Champagne Nurseries on Lemonade Funding' group, we know that the majority of childcare providers are in a similar situation, and that for many, opting out is the only option.
How can this be allowed to happen?
This 30-hour 'free childcare' pledge played a huge role in the government winning the last election – and yet I believe they knew the promise would never be fulfilled. Instead, we have early-years providers being advised to charge parents for what the government has said is a free offer.
We have spoken directly to the parents at our nursery about our decision not to offer the 30 hours and all those that it will effect have stressed that it is more important that we stay open. At least they value us.
For us, supporting the Pre-school Learning Alliance's Fair Future Funding campaign is paramount to ensuring quality early-years provision continues: for sufficiency, for sustainability and, ultimately, for the economy.
The Pre-school Learning Alliance's Fair Future Funding campaign is calling for government to ensure that early-years funding matches rising delivery costs to ensure that the 'free childcare' offer is genuinely free for both parents and childcare providers.
Parents that want to support the campaign can sign up at //www.pre-school.org.uk/fffparents.
For more information about the 30-hours free childcare offer, please click here.
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Guest posts
"We simply cannot afford to offer 30 hours of funded childcare"
70 replies
MumsnetGuestPosts · 03/07/2017 11:39
OP posts:
TooStressyForMyOwnGood ·
03/07/2017 21:12
Totally agree OP. Childcare providers have been flagging up these issues since the 39 hours was first proposed but 30 hours 'free' childcare is a vote winner so nobody cares what the providers think... until they all go out of business of course 
.
katymac ·
03/07/2017 21:19
I may have said this before:
I went spectaculy bust on Mar 16 after 2 terms when they dropped the funding from £5.06 to £3.30
Made everyone redundant, got a job in a cafe,let down all my parents
But no matter how good I am with a spreadsheet I couldn't do a 40% drop in income with rising costs
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