Parents may face charges for ‘free’ UK childcare scheme, nurseries warn

‘To some extent the government don’t help. They’ve made it a low-wage industry,’ says a member of the National Day Nurseries Association

The Government is proposing 30 hours’ free childcare to parents, at an offer of £4 an hour funding to nurseries (Getty)

A Government promise for “free” nursery places is under threat from lack of funds that could require parents to pick up the tab or lose certain benefits for their children, it has been claimed.

Leading professionals say the Conservative Party’s manifesto pledge of 30 hours of “free” childcare per week for three- and four-year-old children could push many early years’ organisations to operate at a loss.

Nursery school budgets already squeezed by a “chronic funding gap” dating back to the Nineties have been further hit by government austerity, increased employer pension contributions and having to pay for better qualified staff.

And now the proposal to increase “free” childcare places from 15 to 30 hours a week could prevent nurseries from offering children a guaranteed spot for 52 weeks unless parents were able to contribute, experts have said.

Instead, some nurseries are set to ask the Department for Education for permission to offer parents short-term places for their children for a maximum of just 38 weeks as a way to balance the books. The Department has rebutted the claims and said it is spending a “record” amount on childcare over the next four years.

The £4-an-hour funding offered by the government will not cover staff salary costs, said Ken McArthur, owner of Pollyanna’s Daycare Nursery in York and member of the National Day Nurseries Association (NDNA).

Ken McArthur, owner of Polly Anna's Nursery in York and former head of the National Day Nurseries Association, has said he needs to offer two kinds of contracts to parents to be able to make the new ‘free’ places proposal workable (Ken McArthur)

He said he needed to offer two kinds of contracts to parents to be able to make the new “free” places proposal workable.

“The Government is not able to fund the services we are offering. They are providing a base service,” he told The Independent.

“So now I am looking at two options. Parents will have a choice. They can stay the same as they are now, guaranteeing their place for 52 weeks, all the events and activities, over and above what is the basic provision.

“And to do that I’ll have to charge another 75p an hour, if they choose that option.

“Or, they can stay on totally ‘free’ places, but they would have to cancel their existing contract, and apply for a place for term time only and only for 38 weeks.”

Mr McArthur’s nursery, which Ofsted rates ‘outstanding’, is part of a government pilot in York which tested the new £4-an-hour, 30 “free” hours a week policy.

The increase from 15 to 30 hours a week comes at a time when nurseries have seen a budget freeze alongside requirements that all staff have a Level Three in Early Years Education, leading to higher staff costs.

Mr McArthur said if he “forced” the extra 75p charge on parents at his nursery, rather than offered it, he could potentially be breaking the law under the current framework.

“I understand the Government say they can’t find any more funding, but I need to offer this to cover costs,” he said.

“To some extent the government don’t help. They’ve made it a low-wage industry.”

Meanwhile, the NDNA said its members expected £4.85, rather than £4, an hour to cover all costs in nurseries following the new proposals.

Chief executive Purnima Tanuku said she wished to meet Theresa May’s new early years minister, Caroline Dinenage.

She said the Government needed to understand that a “chronic lack of funding” dating back to Labour’s introduction of funded nursery places in the 1997 meant the Conservative’s proposed £6bn for childcare over the next four years would not be sufficient.

“The bottom line is there is not enough funding to deliver this proposal,” she told The Independent.

“Yes, they are putting millions of pounds in but they are actually trying to fill a gap that has been going on for years and years.

“In fact, many nurseries will actually get less than what they are getting now if they move to the free 30-hours-a-week proposal.

“You just can’t ask providers to cover all of this.”

The 30-hour proposal is on offer to families in work with an income of at least £115 a week. It is only on offer in England.

The current nursery funding framework was established in 1997 and is not scaled according to different parts of the country. Most nurseries are taxed at a business rate, unlike schools which do not have to pay a business rate.

In response to criticisms of the new childcare proposal, a Department for Education spokesperson said: “We are doubling our free childcare offer for working parents to make it easier for them to get on and balance work with their family lives.

“We will be spending a record £6bn on childcare by the end of this Parliament and recently published plans for a fairer funding system for nurseries and preschools, which received widespread support.

“We had huge demand from local areas to take part in delivering our 30-hour offer a year early and the eight areas that were chosen – including York – will help us get the delivery of our offer right so we can hit the ground running in September 2017.”