Plans to divert millions of pounds from state-run nurseries to the private sector have been delayed by the Government. The reform had aimed to distribute funding more fairly.
Dawn Primarolo, the Children's minister, told MPs on the Children, Schools and Families Select Committee that the new rules, due to come into force in April 2010, should be delayed until April 2011. She said two-thirds of councils were not ready for the "very complex" changes.
Private and volunteer-run nurseries had lobbied for the change. They cater for the majority of three- to five-year-olds and argue that they have been under-funded for decades. But critics of the reforms, including early childhood experts, warned that the changes would force state-run nurseries to lay off staff, increase class sizes and, in some cases, close.
State-run nurseries are thought to play a crucial role in helping children from the poorest and most vulnerable backgrounds. There are about 430 state-funded nurseries in England, including standalone nursery schools, nursery classes within primary schools and children's centres. Every three- and four-year-old is entitled to 12.5 hours of free early education a week, increasing to 15 hours from next September.
The new rules will introduce a single funding formula in each local authority to pay for the free childcare and redistribute funding to the privately run nurseries. Ms Primarolo denied that the changes would undermine excellence in state-run nurseries.
The minister told MPs she was "minded to postpone the implementation of the single funding formula" because only a third of local authorities were ready to make the changes, and nurseries and parents had expressed concerns. The recession had meant that local authorities had been preoccupied with other issues rather than preparing for the introduction of the single funding formula.
Purnima Tanuku, chief executive of the National Day Nurseries Association, said that private and voluntary nurseries would be dismayed at the delay, because they were depending on the reforms to resolve their funding crisis.
Megan Pacey, chief executive of Early Education, welcomed the delay: "I am delighted that we have some time to iron out some of the problems."