HARD-PRESSED parents face a double whammy of childcare price rises and a shortage of nursery school places from September.

Nurseries have warned that the new Government policy, offering 30 hours’ free childcare, is not properly funded and could force them to put up childcare fees by as much as 10 per cent.

This would leave parents, already struggling to afford childcare costs of up to £1,000 a month, further out of pocket.

There are also fears that many nurseries will choose not to offer the extra free hours, leaving parents scrabbling to find places.

Sarah Steel, founder and managing director of The Old Station Nursery firm, employs 150 staff across seven children’s nurseries, including five in Oxfordshire.

Ms Steel said her nursery firm is already struggling with a shortfall between the amount of funding provided by the council for parents of three and four-year-olds, eligible for 15 hours of free childcare a week.

The number of free childcare hours for working parents will double to 30 from September and Ms Steel believes this will make it impossible for many nurseries to break even.

Nurseries will receive £4.01 per hour per child from Oxfordshire County Council from September but Ms Steel says the true costs of staff, snacks, nappies and food is nearer £5-6 per child.

Bosses say an added strain is the new higher national minimum wage, which came into force on April 6, pushing up wages from £7.20 to £7.50 an hour.

Ms Steel, a member of the National Day Nurseries Association policy board, estimated the minimum wage increase will add 10 per cent to the overall cost of her firm’s payroll.

She believes she may have to put up parents’ nursery fees by 10 per cent.

Ms Steel said: “We are losing money per child and that’s not sustainable, so the only way we can balance this out is to charge parents more.

“We would like to pay all our employees more because they are absolutely worth it but our hands are tied by what the Government pays us.”

She added: “We will be struggling, so the cost will be passed on to parents.

“Lots of parents won’t be able to afford that increase and may find the cost of nursery going up will make it not worth working.”

The National Day Nurseries Association has called for an increase in Government funding for the free childcare scheme.

An NDNA survey showed one in five day-care nurseries nationally will not deliver the Government’s 30 free hours scheme, leaving 50,000 children across the country without places.

NDNA chief executive Purnima Tanuku said: “Because the 30 ‘free’ hours policy is underfunded, many nurseries told us they will turn their backs on this expansion.

“It is time the Government stopped promising parents ‘free’ childcare hours unless they are prepared to invest the money needed.”

The Old Station Nursery’s latest branch at Oxford Science Park was opened in January by Early Years Minister Caroline Dinenage.

Ms Steele said she had explained the problem to the Minister.

She said: “We tell them our problem whenever we meet and ask them to reconsider the funding the provide.

“It is all a bit smoke and mirrors.”

Speaking earlier this month Ms Dinenage said: "As part of our Plan for Britain we want to make this a country that works for everyone, not just the privileged few, so that means removing the barriers facing parents struggling to balance their jobs with the cost of childcare.

“This investment will deliver more childcare places to working parents, giving them the benefits of 30 hours free childcare while giving their children high-quality early education that sets them up for life. This is backed by our record £6 billion investment in childcare per year by 2020.”

A county council spokesman said: "The amount the council pays per place, per hour simply reflects the funding made available to Oxfordshire by central Government.

"This is the case for all local councils."

EFFECT ON PARENTS 

TINA MARSHALL from Witney has two children, two-year-old Archie and four-year-old Toby, who both go to the Co-operative day nursery in the town’s Madley Park.

Both boys are in nursery for two-and-a-half days a week, while Mrs Marshall lectures in business and marketing at Abingdon and Witney College. 

Although Toby receives 15 free hours of childcare under the present Government scheme, Mrs Marshall, 40, and husband Roland, 37, spend between £600 and £800 per month on nursery fees.

She said: “It’s a huge chunk of money.
“But my boys get a lot out of going to nursery – it’s a great and the staff are amazing. But if the fees go up, then it’s not good for anyone.”

Fellow Witney mum Lisa Butler also sends her children, 19-month-old Libby and four-year-old Frankie to the Co-operative nursery in Madley Park for three days each week. 

Mrs Butler and husband Leigh, 40, pay more than £1,000 a month in childcare fees, despite having 15 free hours for Frankie and a discount for having two children at the same nursery.

Mrs Butler, 39, an account manager for a housewares firm, said: “Having the extra free hours of childcare from September will be beneficial but the problem is, nurseries can’t afford it. The job I do is not easy and sometimes I think ‘I want to work and love what I do but is it really worth it for the little bit of money I bring home?’ I do question it and if the cost of goes up even more, that will be difficult.”

Chinnor-based mum-of-two Lee King spends £500 a month on childcare at for 20-month-old Greer who goes to a nearby nursery for one-and-a-half days a week plus ‘wraparound’ care before and after school when needed for six-year-old Elliot. 

Mrs King, 40, who runs her own public relations business, said: “I feel positive about childcare because it gives our daughter a chance to grow and socialise and that’s the positive. But half the cost of our mortgage goes on childcare each month. If there are price rises, it is going to affect our budget.”