Half of nurseries cannot afford free childcare – survey

ALMOST half of nurseries might not be able to afford the 30 hours of free childcare promised by the Welsh Government, a survey has found.

A survey by the National Day Nurseries Association has found 45% of nurseries are uncertain about, or unlikely to offer 30 funded hours from 2020.

More than three-quarters of nurseries have said they plan to raise their fees – by an average of 4.3% – in the coming year to deal with increasing business costs.

The charity claims the Welsh childcare sector is the most fragile in the UK with just 35% of nurseries confident about the future.

The report, featuring the views of owners and managers at 122 nurseries, or roughly 20% of the industry, reveals Wales currently has the lowest hourly rates for funded childcare in Britain.

The hourly rates paid to nurseries in Wales is currently £3.15 per hour compared with £3.94 in England.

They have warned that thousands of families in Wales could struggle to find a nursery offering the promised 30 funded hours unless the Welsh government changes its plans.

The scheme - which would see parents get 30 free hours a week, 48 weeks of the year, for three and four year olds - was a centrepiece of the Welsh Labour manifesto in last year’s National Assembly election.

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association, warned that nurseries wanted to be part of the scheme but that it could put them out of business.

She said: “Fewer than half of nurseries we asked were currently making a profit or surplus, with average loses on each three and four-year-old funded place of £958 per year.

“More ‘free’ childcare could make this situation worse if the funding isn’t sufficient.”

Mrs Tanuku added: “As things stand there is no such thing as a free nursery hour.

“Three quarters of responding nurseries plan to increase their fees for paying parents to help bridge the funding gap. This isn’t fair on families or childcare providers.

“Average occupancy in private nurseries in Wales is still very low at 68% which is not high enough for the sector to thrive.

“Unless this situation is reversed, there’s a real danger there won’t be a private nursery sector in Wales, ready to offer the high-quality flexible childcare that parents need.”

The Welsh Conservatives claimed that the Welsh Government’s failure to reevaluate business rates was adding to nurseries’ burdens.

Darren Millar AM, Welsh Conservative Shadow Secretary for Children, said: “The report casts serious doubt over the Welsh Labour Government’s ability to fulfil its manifesto commitment to deliver free childcare.

“It’s clear that the nurseries across the sector are suffering from inadequate levels of funding and Labour ministers’ poor handling of the new business rates revaluation, with many providers running to a significant annual loss as a consequence.

But a spokesman for the Welsh Government said they were committed to ensuring the scheme worked for parents and providers.

He said: “When implemented, Welsh Labour’s childcare offer will be the best in the UK for working parents.

“Childcare providers in Wales are entitled to an enhanced level of support through our £100m Small Business Rates Relief Scheme.

“We have also announced an extra £20m of support for small businesses in 2017-18 through two bespoke schemes including a transitional support scheme.”