Childcare providers fear closure over 30-hour offer, survey reveals

Half of childcare providers fear that they could be forced to close as a result of the 30-hour free entitlement offer, a new survey conducted by leading early years membership organisation the Pre-school Learning Alliance has found.

The survey also found that half of providers would offer less places to children of other ages if they did deliver the extended entitlement.

The findings come as the Public Account Committee prepares to question the Department for Education on the potential impact of the policy today, as part of a broader enquiry into the free entitlement.

Approximately 1500 providers responded to an online survey conducted by the Alliance in March. The results reveal that:

  • 49% of providers think there’s a risk that they could close as a result of the 30-hour free childcare extension (with a further 1% already planning on closing)
  • 48% think that the 30-hour offer will cause them to reduce the number of places they offer to other age groups
  • 50% don’t feel confident that they have the capacity to meet the demand for places under the 30-hour offer
  • 58% expect the 30-hour offer to have a negative financial impact on their business
  • 19% aren’t planning to offer the 30-hour offer, while a further 51% aren’t sure – in comparison, 98% of respondents currently offer the 15 hour free entitlement.

Last month, the National Audit Office published a report on the free entitlement which warned that local authorities were likely to find it difficult to provide sufficient places, and that the new entitlement for three- and four-year-olds could put further implementation of the entitlement for disadvantaged two-year-olds at risk.

Commenting on the survey results, Neil Leitch, chief executive of the Pre-school Learning Alliance, said:

“These figures are a stark warning of what could happen if the government insists on rolling out an underfunded, under-resourced free entitlement offer. While we welcome plans to increase average early years funding rates as an important first step, independent research has shown that, with continued cost pressures including the introduction of the ‘national living wage’, this will still leave a significant funding gap for early years providers. Given that the move to 30 hours means that most providers will no longer be able to cross-subsidise in order to plug this gap, it’s no surprise that so many are fearing for their future.

“The Department for Education seems to be working on the assumption that the sector will simply fall in line and roll out the offer, whether or not the funding is there to support it – but it cannot expect providers to put the sustainability of their businesses at risk to fulfil a manifesto promise that they didn’t make and that wasn’t properly thought through in the first place. The fact that 98% of survey respondents currently deliver the 15 hour offer, but only 30% are definitely planning to deliver the 30 hour offer, speaks volumes. We are quickly getting to a point where more and more providers are saying enough is enough.”

Commenting on the survey finding that half of providers would reduce the number of places they offer to other age groups if they did roll out the 30 hour offer, Neil Leitch said:

“The government has chosen to turn a blind eye to concerns over whether the sector has the capacity to deliver the offer, but the fact is, those extra places have to come from somewhere. Many of those providers who are able to roll out the extended offer will have no choice but to reduce the number of places for other age groups, as the National Audit Office warned in its recent report.

“This policy has been sold as a solution for working parents, but unless the sector is adequately supported to deliver it, it’s only going to create more problems.

“We want the 30-hour offer to be a success, for the sake of both parents and providers, but the only way that this will happen is if the government and the sector work together. As such, we look forward to working in partnership with the DfE on addressing these serious concerns and working towards our shared aim of a quality, affordable and, crucially, sustainable early years sector.”

 

SURVEY FINDINGS:

Total number of respondents = 1443.

 1. How would you describe your provision type?            

Nursery or pre-school providing full daycare: 37.0%

Nursery or pre-school providing sessional daycare: 55.7%            

Childminder: 1.7%          

Primary school nursery class: 0.4%

Maintained nursery school: 0.4%             

Nanny: 0.1%      

Reception class Reception class: 0.1%

Breakfast and/ or after school club: 0.6%

Other: 3.8%       

                                                                                

2. How many children do you currently have on roll?    

0-20: 9.3%          

21-40: 34.1%      

41-60: 28.2%      

61-80: 11.6%      

81-100: 7.5%      

101+: 9.3%         

                                   

3. Do you currently offer the 15 hour free entitlement for three- and four-year-olds?  

Yes: 97.8%

No: 2.2%             

                                               

4. Are you planning to offer the 30-hour free entitlement for eligible three- and four-year-olds?           

Yes: 29.9%          

Unsure: 51.5%  

No: 18.6%                      

                                              

5. What kind of financial impact do you expect the introduction of the 30-hour offer to have on your business?               

Very positive: 6.8%

Somewhat positive: 12.9%

Neither positive nor negative: 22.7%     

Somewhat negative: 32.7%

Very negative: 25.0%

               

6. Do you feel confident that your provision will have the capacity to meet the demand for places under the 30-hour offer?        

Yes, very confident: 14.1%          

Yes, fairly confident: 35.8%

No, fairly unconfident: 32.3%    

No, very unconfident: 17.8%     

                                               

7. What kind of impact do you expect the introduction of the 30-hour offer to have on the availability of places for children of other age groups?   

The number of places we offer will increase: 9.7%           

The number of places we offer will decrease: 48.3%       

The number of places we offer will stay the same: 42.0%                             

                                           

8. Do you think there is a risk that your provision could close as a result of the introduction of the 30-hour offer?               

No: 50.7%           

Yes, possibly: 48.5%       

Yes, we are planning on closing: 0.8%    

                                               

9. Do you know how many families at your provision will be eligible for the 30-hour offer when it is introduced in 2017?   

Yes: 21.3%          

No: 78.7%           

 

For further information or to interview, Neil Leitch, Chief Executive of the Pre-school Learning Alliance, please contact:

Emma Caldwell
Pre-school Learning Alliance
T: 020 7697 2598
E: Emma Caldwell

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Notes for editors

  1. The Pre-school Learning Alliance is the largest voluntary sector provider of quality affordable childcare and education in England.
  2. Through direct provision and its membership of 14,000 nurseries, sessional pre-schools and parent and toddler groups, the Alliance supports over 800,000 children and their families in England. The Alliance also develops and runs family learning programmes, offers information and advice, runs acclaimed training and accreditation programmes and campaigns to influence early years policy and practice.
  3. For information about the Pre-school Learning Alliance, visit our website: www.pre-school.org.uk

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