Nurseries in Lincolnshire reveal concern at government’s expansion of funded childcare scheme

Nurseries say the impending expansion of the government’s childcare scheme could be a ‘ticking time-bomb’ with parents likely to find there aren’t as many available places as they will be entitled to.

From next April ministers are offering more families help with childcare, with the aim that by September 2025 most working families with children under the age of five will be able to claim 30 hours of care each week.

The changes, say the government, are being ‘introduced gradually’ to make sure providers can meet the needs of more families. Starting in April, eligible working parents of two-year-olds will get access to 15 hours of childcare support.

There are also proposals to inject a further £400 million into the system as its rolled out to, ‘uplift’ local authority hourly rates – which is the money nurseries are given to help pay for children in their care who are claiming government-funded hours.

But with some areas of Lincolnshire already experiencing a shortfall in places - even before the scheme’s expansion - and with nurseries already struggling with huge overheads and large wage bills, providers have concerns about what’s to come.

Stephanie Barrett from BeBright Pre School fears the expansion will place a lot of pressure on nurseries, many of which are already struggling to meet an existing demand.

She said: “I feel for parents and I feel for families because they are, in my opinion, being duped. It’s not a scheme that is fit for purpose.”

The pre-school in Saddlers Mead, Spalding, was forced to make redundancies in May as part of ‘damage limitation’ efforts to scale-back costs while the business was also fortunate enough to be offered a short-term rent reduction by, what Stephanie says, is an understanding and supportive landlord. But overheads remain astronomical.

Meanwhile government plans to both increase the hourly rate of the national living wage for workers from £10.42 to £11.44 – and lower the age limit from 23 to 21 from next year for those entitled to it – will also place additional cost pressures on already struggling company budgets.

Stephanie explained: “It’s really difficult.

“Working parents need the childcare. I’ve got the capacity but it’s so expensive. Our overheads are huge. We won’t cover ourselves.”

Current ‘free’ provision

Currently it is only children aged three and four who are entitled to up to 15 hours of early education and childcare, over 38 weeks of the year.

Some eligible two-year-olds who come from lower income households which are claiming certain means-tested benefits can also apply for a number of free childcare hours in England.

But from September next year, after the initial April expansion, the 15 hours of childcare support will be extended to eligible working parents of children aged 9 months to three.

And after September 2025 eligible working parents of all children under the age of five will be entitled to 30 hours of childcare a week.

But nurseries in the county say they may not be able to offer the number of places they anticipate will be needed to meet the increased demand when thousands and thousands more families can claim additional ‘funded’ hours.

Struggling to keep up with demand

In May 2022 Lincolnshire County Council said close to 100 spaces were needed in Spalding alone to meet childcare needs at the time.

And while an additional 30 spaces have been created over the last year – the shortfall is estimated to remain the same as changes in the population have brought with it continued demand for places.

Coun Patricia Bradwell (Con), executive member for children’s services, explained: “It’s vital that parents have access to suitable childcare, so they can go out to work, study, or train, and the council works closely with childcare providers to ensure there are enough places locally. Compared to last year, there are now 30 additional places in Spalding, with 772 places now available for children up to five. The council continues to work with a number of local providers to develop new places and hope to further increase the number of spaces in 2024.

“There has been no change in Grantham or Stamford as there are currently a sufficient number of places. However, there is likely to be an increase in demand as a result of the additional childcare funding being introduced in 2024 that was recently announced by the government. So, the council will be working with the sector to expand the number of places if required.”

While nurseries and other childcare settings don’t have to accept government-supported places, Stephanie at BeBright said most providers need to join the scheme in some form in order to attract families to their setting.

But having already seen some providers plunged into difficulties triggered by the pandemic and now the ongoing cost of living crisis, she expects others may not survive.

She said: “I think people are already closing. People are closing now. And people do think ‘we cannot keep fighting anymore’.

“We are all qualified and they, our staff, are not being paid accordingly.

“It’s the most important piece of a child’s education. It’s the most crucial part. We have to get this right for society. If we all start to have to close our doors where will these children learn those skills.”

‘A bleak future’

Her thoughts are echoed by Joshua Agdomar at Building Blocks Day Nurseries, which has facilities in Pinchbeck, Holbeach and Spalding.

He explains the government currently pay £4.75 an hour for a three-year-old whose parents are claiming their ‘free’ hours but in reality the cost of the nursery delivering the care is much closer to £6.50 an hour.

In response to changes in the national living wage that nurseries will have to adopt for workers, the government is proposing to up its hourly contribution, which would rise to £5.88 for three-and four-year-olds from April.

But it could still mean nurseries are left meeting a gap at a stage when many more families would like to claim more childcare under the new policy.

“It’s a significant shortfall” he said. “It means we are running at a loss. It’s a big challenge.

“We hope that the government will come good and we hope as a larger nursery that we will be able to ride the storm.”

Mr Agdomar says closures in the sector remain a ‘serious problem’ as nurseries struggle with huge overheads and he fears more will shut their doors in the months ahead.

His business, he explained, pays around £35,000 a year in business rates alone combined with ‘dreadful’ energy and wage bills.

A relax or release on those rates, such as that introduced during the pandemic, he suggests might help support much-needed childcare settings which are struggling to stay afloat.

“We are already in a place where there are not enough spaces. It’s really really difficult” he added.

“It’s a bleak future for many. I see for the small providers that things are going to get really difficult.”

What do you think? Do you struggle to access childcare? What should be done to help providers keep pace with demand? Post your comments below or email andrew.brookes@iliffepublishing.co.uk