‘Free’ childcare expansion: how are nurseries faring?

From this month, eligible working parents in England can access up to 15 hours a week of ‘free’ childcare for children from nine months onwards during term time [38 weeks of the year].

This follows on from the extension of 15 hours a week ‘free’ childcare to two year olds in April in term time. The plan is to double this by next September for children from nine months up.

Parents can spread the ‘free’ hours over the whole year, meaning they would have fewer than 15 ‘free’ hours a week. Parents – both parents if they are living together – have to be earning at least the equivalent of 16 hours a week on the National Living Wage, either employer or self-employed.

The application system requires parents to reconfirm their eligibility for the government-funded hours childcare every three months.

It’s seemingly good news for parents, but childcare providers have expressed a lot of concern about their ability to meet demand after years of underfunding of the offer by Government [and some councils holding back some of the money] and amid a recruitment crisis. The situation varies according to which area you live in and many nurseries who can cope with increasing demand now say that from January when the ‘free’ hours go up they may be struggling.

What do the nurseries say

We spoke to several nurseries in the south east. These are generally not struggling as much as other parts of England. Some parts of the country, including Dover, Birmingham, Yardley, Great Yarmouth and Walsall North, are considered childcare deserts, for instance, due to the number of childcare providers which have closed. Yet even in these wealthier areas,  some of the nurseries we spoke to were worried. While some were ready for September, almost all expressed concern about January.

Mihaela Fulga says interest in the 15 hours of ‘free’ childcare for nine month olds upwards is growing among parents applying to her nursery – Meadow View Childcare in Welwyn, Hertfordshire. The 15 hours are available to eligible working parents from September and Mihaela says she has seen existing parents increasing their days as a result. She has already seen a rise in demand for two year olds who qualified for 15 hours ‘free’ childcare earlier this year.

Nevertheless, Mihaela is already worrying about the implications for next year when the 15 hours doubles to 30 and whether her nursery will have capacity for new parents as well as existing ones. For other nurseries, though, things are relatively stable.

Hewett under 5s in Norwich is a small, independent, term-time only, not for profit provider. Co-director Rebecca West says it has definitely seen more interest in advance of the extension of ‘free’ childcare. Mostly it is current parents taking advantage of the offer, but there are some new babies too whereas usually there is usually more demand for pre-schoolers at this time of year.

Because Hewett under 5s is term time only, the vast majority of its parents are teachers. Other children are only on the subsidised hours. However, the nursery has managed to keep fees down to 40 pounds for a full day and 20 pounds for a half day and West doesn’t anticipate this changing as it is in the fortunate position that it doesn’t have to turn a profit. Parents do have to bring lunches and nappies, however.

Other nurseries are looking to move from term-time hours to full time, in part so they can charge for the holiday periods that the ‘free’ funding doesn’t cover. Others are looking to take on more younger children because of the big difference in the amount of money the Government pays for them compared to preschoolers.

Happy Bunnies Nursery School is in Shepreth in the relatively affluent area of South Cambridgeshire. It has seen a change in management and approach in the last 17 months under the ownership of Robert Fox. Last September, it went from a pre-school model that operated from 9-4pm in term time to an 8am to 5pm model that included one year olds. The nursery offers a whole range of activities that cater to the ‘whole’ child.

While recruitment is a big issue in the sector, Fox says that offering the right pay, a good supportive network and a sense of being cared for has helped him to build his team. He has recently hired an additional three members of staff in order to cope with the increase of spaces at the nursery due to the extension of ‘free’ childcare as well as introducing a new section of the nursery to accommodate more children aged from 12 to 18 months.

In order to remain a sustainable business, Fox says he has to charge parents the 10.75 pounds he will receive from the Government for nine month olds, rather than the 5.40 pounds he gets for three and four year olds, which doesn’t cover the full cost of provision and would mean he was operating in deficit – something that will only get worse as the minimum wage and other costs rise. He does, however, make allowances for some parents on lower incomes and for SEND children. He also charges extra for things like nappies and snacks which parents can opt out of.

For other providers, however, the future is very uncertain and they are worried. Nishrin Alibhai from Little Elms Montessori nursery in Potters Bar in Hertfordshire says she has had to move from a term-time only model to full time from September in order to be able to charge more for the non-funded hours, just so the nursery can survive.

She says staffing is fine for now, but she thinks she will struggle to find the right people in the future as the nursery is open for more hours.  She also needs more space for younger children, but cannot afford this without external support because the budget is so tight due to the underfunding of ‘free’ childcare. She would love to pay her staff more, but is currently unable to with many of her costs increasing.

The future is by no means clear for nurseries – and the parents who depend on them.

*You can check your eligibility for ‘free’ childcare at childcarechoices.gov.uk and read up on the application process on the Education Hub.

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