Nurseries now closing ahead of 30 hours due to low funding and wider business pressures

Some nurseries across England are now closing because expanding ‘free’ childcare coupled with other business pressures are making their businesses unsustainable.

The prospect of 30 ‘free’ hours from September has been the last straw for some businesses after years of underfunding from successive governments.

While numbers are too few to establish patterns, NDNA has noted an upturn in numbers of closures among private and voluntary nurseries, due to combined business pressures including the forthcoming 30 hours.

NDNA Chief Executive, Purnima Tanuku OBE, said: “The nurseries closing tend to be small but much-loved and long-established preschools.

“As the voice of the sector we have long been calling for better funding rates to allow nurseries to balance their books.

“We have warned that nurseries will be pushed out of business by low hourly rates for ‘free’ places and it appears that this is now starting to happen. Our fears are that more will follow.”

NDNA’s Annual Nursery Survey, published in April, revealed that one in five responding nurseries did not plan to deliver 30 hours and 17% of settings expected to make a loss in 2017/8. 

An NDNA survey of local authority funding rates for 30 hours last month showed the average rise in hourly rates was just 40p, an amount Ms Tanuku dismissed as ‘totally inadequate’ to allow many nurseries to deliver 30 hours.

Three and four-year-olds of working parents in England are eligible for 30 hours’ funded childcare from this September, a doubling of the current allocation of 15 hours.

Fidgety Fingers, Harlow, Essex, closing July 26th

Fidgety Fingers will be closing on 26 July, largely due to the prospect of doubling losses by providing 30 hours.

Owner and manager, Jackie Neagle said: “The Government advertise that children aged three and four receive 15 hours 'free' early years education per week. What they don't say is that it's only paid for 38 weeks per year and it's often paid at a much lesser rate than nurseries and childminders need to charge to stay afloat. In our case we now run at a loss of £1.95 per hour per child, for each child who takes up a free place. 

“We are not allowed to charge the parents 'top ups' to make up the difference. So we run at a loss for the first 15 hours that we give and from September 2017 the Government want us to give 30 hours free, so this will be double the loss. 

 “Fidgety Fingers is an ‘outstanding’ setting, in every area, four times over but we cannot do it any more. The early years sector, myself included have been campaigning for many years to have the word 'free' removed and replaced with 'subsidised' early years funding. 

“We are so grateful to all the parents that have supported us over the years and for making voluntary payments, buying extra hours and contributing towards resources. 

“But due to the increase in utility bills, compulsory staff pensions and increases of the minimum wage and living wage, the situation has become unsustainable.

“I honestly believe the Government have no idea what Fidgety Fingers and settings like us actually do for the children and families in our care.”

Rising Stars Preschool, Eastbourne, closing July 20th

Rising Stars Preschool in Eastbourne, East Sussex, is closing after 40 years – because the committee can’t pay staff and cover rent on the funding rate offered through East Sussex County Council.

The council’s 30 hour rate is £4 but Rising Stars has calculated it needs at least £4.50 to break even. A total of 20 to 28 children aged two to four currently attend the nursery in a superb purpose-built church hall near the beach.

Rising Stars has had to tell families the sad news and is working with them to find alternative places for September where needed.

Consultant to Rising Stars, Kate Peach, said: “A total of 94% of children attending are using free hours so there is no opportunity to cross subsidise with income from paying families. 

“The preschool is a stunning, purpose-built space, serving a less affluent area. It is a huge loss to the community.

“There are great garden spaces, they get involved in the local community and do beach acitivities but which ever way you look at it, the finances don’t now stack up. Because free hours have been underfunded for so long, there is nothing in reserve.

“The church reduced the rent, which was very reasonable in the first place, but even that wasn’t enough.”

The Grange Nursery, Worcester, which closed in February

The Grange Nursery operated for 24 years in the Claines area but the prospect of 30 hours at a low funding rate, coupled with other issues, forced closure.

Jane Dallard of The Grange Nursery, which had a good Ofsted rating, explained: “The Grange operated from a lovely building, so clean and tidy and nice – a great environment for the children. But our rent was comparatively high and we set our ratios high.

“The 15-hours-per-week funding falls short of what we need and after years and years of underfunding, we feel we were dragged right down. It was like a drip, drip, drip, and the prospect of 30 hours was too much.

“By December I was paying £450 a week of my own money to keep the preschool open and we finally had to close at February half term which was devastating.”

Anchors Nursery School in Rotherwick, Hampshire, closed in early July

Principal Eve Wort said: “We have closed this month after 21 years. This is due to the Government’s ridiculous ill-thought-out 30 hour offer of free childcare. I cannot afford to offer this and refuse to compromise on quality.

“If the Government just took out the word ‘free’ from ‘free childcare’ and called it subsidised, so that parents could be required to pay a small supplementary charge where necessary, the whole system would work and everyone would be happy.

“The Government says it has costed 30 hours but it hasn’t costed for quality provision. I won’t be the only one closing.”

Norland-college trained Eve opened Anchors in 1996.

Secret Garden Nursery, Skegness, closing on August 23

Owner Linda Meacher, who has run the nursery for eight years, is closing because of low funding rates for 30 hours as well as an ongoing issue with her lease.

She said: “95% of the places we offer are funded places as we are in a deprived area and 30 hours means that running the nursery is no longer a viable proposition.

“Any money I have ever made from Secret Garden has been ploughed back into the business and I am walking away with nothing. Parents couldn’t believe it when we told them we would have to close.

“Nurseries are so important for children at the beginning of their lives and the funding is lousy. The people who choose to work with young children are so passionate and committed to their jobs but the Government doesn’t recognise or support them. It really hurts to make those great staff redundant.”

Pip-Kins Day Nursery, Exeter town centre, closed mid-February

Owner Sally Langdon closed Pip-Kins after 21 years, selling up to a buyer who changed the building back to residential use.

Sally said: “The prospect of 30 hours, funding not allowing the margins with which we can reinvest in order to give the children the quality childcare they rightly deserve convinced me that the time was right to sell and move on.”


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