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Many childcare providers forced to limit Government-funded places, charity warns

Many childcare providers forced to limit Government-funded places, charity warns

13 March 2025  

The Early Years Alliance surveyed 1,155 senior staff in nurseries, preschools and childminders.

Many childcare providers in England will be forced to limit the number of Government-funded places on offer to parents and increase prices due to financial pressures, a charity has warned.

Early years settings face a "perfect storm of challenges" due to national insurance and minimum wage rises and "many will not be able to survive", according to the Early Years Alliance (EYA).

A survey - of 1,155 senior staff in nurseries, preschools and childminders in England - found 59% of providers are likely to either reduce the number of funded places they offer for three and four-year-olds or they could opt out of offering funded places for this age group entirely.

More than nine in 10 (94%) said their setting is likely to increase fees for non-government-funded hours over the next year, while more than three in four (77%) said they are likely to introduce or increase charges for optional extras such as nappies, meals, and trips.

Nearly three in 10 (28%) said they are likely to permanently close the entire setting over the next year, the poll suggested.

The findings come as the Government's expansion of funded childcare for working parents is being rolled out in England.

Working parents of children older than nine months are now able to access 15 hours of funded childcare, before the full rollout of 30 hours a week to all eligible families in September.

Among the survey respondents currently offering funded places for two-year-olds, 18% said they are likely to reduce the number of funded places they offer, while a further 5% said they could opt out of the scheme entirely.

The EYA survey - carried out online between March 4 and 11 - found that only around a third (36%) of providers currently offering funded two-year-old places for working families are planning to extend all these places from 15 hours to 30 hours a week from September.

Of the settings currently offering funded under-twos places, only 41% are planning to increase all 15-hour places to 30-hour places, according to the poll.

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