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provide funded twos places entitlements, as the start of the roll-out of the expanded policy nears. By Catherine Gaunt costs also have a big impact, I am happy to support but the funding is too low.

‘Parents still think it is free and not all are happy to pay top-up fees. We also have to compete with school nurseries who get much higher funding rates and fewer costs, as they are o en absorbed in school budgets. Several private nurseries near me have closed, which increases the demand for places. Recruiting is very difficult, as low paid we are not valued as a workforce.’

Meanwhile, the Alliance survey found that 86 per cent of nurseries and pre-schools said the rise to the national living wage will impact their setting finances negatively. Among these respondents, the vast majority said they plan to increase fees to mitigate this, while around half said they would introduce or increase optional charges for trips, meals and snacks. Sustainability Tanuku said, ‘The Chancellor must address the huge challenges facing early years providers and focus on measures to support them by increasing funding rates and removing unfair business rates from all early years settings. This is the only way that nurseries can plan for a sustainable future and be able to deliver the increased childcare offer being made to parents.’ When the NDNA asked what changes to the funded policy would enable nurseries to remain sustainable, the top six received in comments were: ■ Increase funding rate in line with inflation/wages/usual rates. ■ Remove the word ‘free’. ■ Pass funding directly to parents/cut out local authorities. ■ Make it easier to charge parents for consumables/ top-up fees. ■ Support with recruitment. ■ Remove business rates for nurseries.

Sector capacity More than half of the nurseries surveyed by NDNA (56 per cent) said there is demand for places they can’t currently meet.

However, a similar proportion (54 per cent) said they could physically expand if they had access to capital grant money.

Staffing is an issue for many, with just under four in ten respondents in the NDNA survey (38 per cent) reporting that they cannot offer places because of a lack of staff.

In the Alliance survey, more than half (55 per cent) of its respondents are already full with a waiting list, while a further 13 per cent are full with no waiting list.

Just 3 per cent of respondents said they had a large number of places available.

One respondent told the Alliance, ‘The funding for two-year-olds and under-twos is being rushed through by the Government with no understanding or thought as to the impact this will have on settings. Parents think that there are spaces available, but our setting – like the majority of settings in our area – is having a staffing crisis with no suitable applicants coming forward to fill our vacancies, which then in turn puts pressure on our staff. I am also worried about delivering the 30 hours from September 2025 and its financial impact on our setting.’ Underfunding for PVI nurseries According to the NDNA, increases to funding rates over the last year mean that slightly fewer nurseries say funding doesn’t cover their costs, although the number is still high, with 83 per cent of nurseries reporting a shortfall, rising to 87 per cent in deprived wards. The NDNA said this figure is significant because nurseries have far more three- and four-year-olds than twoyear-olds. The NDNA survey found an average funding shortfall of £2.36 per child per hour/£1,345 for 15 hours over 38 weeks; £2,690 for 30 hours. The NDNA said that while the average funding rate has increased by 27 per cent since 2017, wages have increased by between 58 and 62 per cent.

Although the two-year-old rate has increased by 26.5 per cent since April 2023 (and up by 4 per cent for April 2024), it is still not covering the costs for the majority. Unfortunately, some local authorities will be decreasing this amount and all councils will be able to top-slice this by 5 per cent, so many nurseries will receive less than they previously did for their two-year-olds. Nine-month-old places The Alliance survey asked providers about whether they planned to offer the funded places for nine-month-olds, due to start in September. This revealed that a similar proportion of providers that said they would offer the two-year-old funded places said they were planning to offer the nine-month-old funded places when the offer comes in. Some providers (4 per cent) are planning to charge privately, 12 per cent to offer a limited number of funded places and charge privately for the rest, and

We are in a low economic area and families cannot pay for extras on top of the funding NDNA SURVEY

What providers say

NDNA ‘State of the Sector England’ survey ‘Three- to four-year-old funding needs to increase by 30 to 40 per cent. Stop using free childcare to sell childcare to parents.’

‘Asking parents to pay for extras is all well and good but it’s not for extras in reality. It’s to cover any shortfall. In turn...putting up wages (living wage), business rates, costs of energy completely erases any increase in funding. It really is a joke.’

Alliance provider survey ‘Adding more children to the mix will only be adding fuel to a burning building, and eventually it will come falling down.’

‘Chronic sector underfunding has zapped me of all innovation and enthusiasm to keep the plates of a PVI setting spinning. It’s criminal.’

17 per cent are as yet undecided on whether to take part or not.

Neil Leitch, CEO of the Alliance, said the findings should send ‘alarm bells ringing through government. With just weeks to go until the roll-out of the extended offer, it is clear that despite the Government’s continued promises, not all eligible families will be able to access the early years places they need.’ The Alliance survey received 1,196 respondents, with just over half (54 per cent) of them nurseries and pre-schools, 43 per cent childminders, and 2 per cent ‘other’. The survey was carried out online between 25 January and 8 February 2024.

www.nurseryworld.co.uk

March 2024 | NurseryWorld | 7

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