Charity reports that a scheme that used to provide 30 hours a week of free childcare had faced a financial crisis on providers.
Since last years’ September, most parents in England were offered with free care for their children aged 3-4 years during term time. However, PSLA (Pre-School Learning Alliance) reports that most childcare providers are struggling hard to remain open due to the increase in running costs.
The government said that it would try to “continue to monitor delivery costs”.
According to the Education Department, parents over 340,000 three-four years old have taken advantage of the scheme since it commenced, over a year. Between July 17 and August 23, PSLA charity has surveyed 8000 childminder firms and nurseries.
The survey obtained answers from 1662 providers and discovered that over 46% felt that the free childcare scheme “had a negative financial impact on their business”, whereas, 2/3rd said that funding for child care did not “cover the full hourly cost of delivering the places.”
Managing Director of The Acorns, Gillian Simpson-Morris in Eldwick day nursery, said that she felt squeezed as child care funding has dropped by 66% to £4.10 an hour, which cost of everything is much high.
She further said that “we have to pass the cost on to parents – we’ve nowhere else to go with it.”
“Because of price hikes everywhere else, everything we buy is going up, the salaries are going up, we’ve got living wages going up, minimum wages going up, it’s not a very highly paid sector but we try and pay what we can,” she added.
Morris continued that “we have to be viable. If we’re not viable then we would disappear and lots of providers nationally have disappeared.”
Two children’s mother Jennifer McCanna from Sheffield said that despite the scheme was not ‘completely free’. Therefore, she saved £400 a month.
Mrs. McCanna continued that “I completely see the point of view of the childcare providers because they have to make their business work.”
Neil Leitch, Chief Executive of PSLA claims that the free childcare scheme required adequate funding.
She further said that “It’s a great thing for the parents. It is not a great thing for the industry. In fact, we’re seeing nurseries close specifically because of the introduction of this 30 hours policy.”
“For the thing to be a success it,” she added.
In a statement, the Education Department said that it offers “£1bn extra funding a year to deliver all of this government’s free childcare offers.”
It continued that “We continue to monitor delivery costs and we have commissioned new research to provide further information on the costs around childcare.”
Education Department also said that parents in England saved up to £5,000 per year on their children care costs.