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Half of childcare providers fear that they may be forced to close as a result of the 30-hours free childcare entitlement initiative, a new survey from the Alliance has discovered.

 

Approximately 1500 childcare providers responded to a survey on the 30-hours offer in March, with 49% saying that there was a risk that they could close as result, and a further 1% already planning on closing.

 

Additional figures showed that 50% are not confident they have the capacity to meet demand for places under the offer, while 48% think it will cause them to reduce the number of places they offer to other age groups.

 

Neil Leitch, chief executive at the Alliance, called these figures a stark warning of what could happen if the government goes ahead with this “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. 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,” he said.

 

“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 early years 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.”

 

98% of respondents said that they already offer the existing 15-hours offer, but only 30% said that they are definitely planning to offer the new 30-hours scheme.

 

The National Audit Office also published a report on the 30-hours offer in March which warned that local authorities were likely to find it difficult to provide enough places under the new scheme.

 

“We are quickly getting to a point where more and more providers are saying enough is enough,” Neil added.

 

“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.”