A majority of the nurseries participating in a pilot childcare scheme have reported a dip in profits.
Parents of three and four year-old children in England will become entitled to 30 hours of free childcare from September, twice the current amount, with the extra time funded by the government. The amount of funding has been a source of controversy, with many nurseries saying the government-mandated rate is simply too low.
A number of childcare providers across eight local authorities took part in a pilot scheme and the Department for Education has now evaluated their experiences. Forty-eight per cent of providers said their profits had fallen since the beginning of the pilot in September, while only 18 per cent said they had brought in more money.
The Department said they believed the 30-hour rollout will still be a success, however, as long as the providers receive proper support.
But professionals expressed doubts. Neil Leitch of the Pres-school Learning Alliance claimed:
“With nearly 50 per cent of private providers reporting a decrease in profits, and many early implementers warning they are likely to limit the number of ‘free’ places due to concerns about financial viability, it is abundantly clear that more investment is needed.”