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Nurseries across England have warned that parents may have to pay higher fees and even face closures due to insufficient funding ahead of an expansion in the provision of free childcare. Early years experts say that the government’s uplift will not cover wage and National Insurance increases. On Tuesday, the government announced that early years funding would increase by £2bn next year in England to support the planned rollout of 30 hours per week of government-funded childcare for all under-fives who are eligible from September. Included in the £2bn uplift is a £75m grant to support nurseries, childminders, and other providers to deliver the 70,000 additional free childcare spaces needed from September.
While the increase in Early Years Pupil Premium has been welcomed, nursery leaders warn that the increases will not be enough to cover rising National Insurance contributions and minimum wage staffing costs. The National Day Nurseries Association (NDNA) warns that additional costs from increased minimum wages and National Insurance contributions next year could add £2,600 per employee in average nursery outgoings, which will seriously impact providers. The NDNA is also warning that some nurseries will have to pass on these rising costs to parents in the form of higher fees.
Nicola Fleury, the owner of Kidzrus, which has five different settings in Salford, states that since the childcare changes began, they have seen a “huge increase in demand” for places. Mrs Fleury says her staffing costs will increase by between £8,000 and £10,000 per month from April. But she says employers’ National Insurance contributions are taking “quite a hike”, and so nurseries “have to get the funds from somewhere.” The recruitment and retention crisis is also still a significant issue for the sector, which does not have enough staff to meet demand.
The regulator Ofsted has also raised concerns that many families struggle to access high-quality early childcare. The decreasing availability of places has not been evenly spread across the country, with the North East, the East Midlands, and Yorkshire and The Humber worst affected. Ofsted says these “childcare deserts” are more likely to be in areas with lower incomes and higher child poverty. The Department for Education says the 45% uplift to Early Years Pupil Premium will provide more support for those families most likely to live in childcare deserts
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