The free childcare offer is driving nurseries to closure, claims report

Four in 10 providers have told the Pre-school Learning Alliance that they could close within 12 months after being forced to put up fees

The free childcare scheme launched by the government a year ago is endangering the future of nurseries, according to a new report.

A Pre-school Learning Alliance and Mumsnet survey has found that four in 10 childcare providers fear closing their doors in the next year. That is following a year of the government’s 30 hours-a-week of funded childcare for working parents, promising to save 380,000 families around £5,000 a year in England. However, nearly half of parents reported that they have been on the receiving end of increased fees after providers were forced to put them up to make ends meet.

The survey of 1,662 responses also discovered that 34 per cent nurseries, pre-schools and other providers were pondering a rise in the next year. A further 19 per cent warned that they would have to introduce additional charges – a practice that four in 10 providers have already adopted this year.

“The fact is that even those providers who are technically managing to make the 30 hours work are often only able to do so by introducing or increasing additional fees and charges,” said Neil Leitch, chief executive of the Alliance. “Is this what the government meant when they promised parents 30 hours of ‘free childcare’?

“And while better parents may be able to shoulder these unexpected costs in the short-term, those on the lower end of the income scale – the families that the government claims to be so committed to supporting – are the ones who are likely to suffer as a result. The inescapable fact is that, as these figures show, without urgent action, the 30 hours policy is simply not viable in the long term.”

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Justine Roberts, founder at Mumsnet, added: “The idea behind giving working parents 30 free hours of childcare is, in theory, a good one. But any scheme needs to be backed up by sufficient planning and funding and our users are telling us this simply isn’t happening.”

A Treasury Committee on childcare has already taken aim at the scheme, warning in March that government figures are ‘misleading’ and based on out-of-date wage data from 2013 and rent and costs data from 2012. They called for funding rates to be increased in line with increasing delivery costs. But the Department for Education has defended the scheme. A spokesperson said: “We have provided £1bn extra funding a year to deliver all of this government’s free childcare offers. We continue to monitor delivery costs and we have commissioned new research to provide further information on the costs around childcare.”

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