Cost Of Childcare May Have To Rise Says Charity

Parents are facing the possibility of higher childcare costs because nurseries and pre-schools are "chronically underfunded" by the Government, it has been claimed.

Care provider and charity the Pre-School Learning Alliance (PSLA) says Government money available for free places does not fully cover the cost of providing care.

Neil Leitch, Chief Executive of the charity told Sky News the situation is unsustainable.

He said: "It will come to a point where the only thing we can do is put up prices.

"At the moment, roughly speaking, half of all nurseries - at best - either make a loss or break even. That's not a good place to be.

"The reality is, when you compare us to our European counterparts, all the countries that we hold out to be exemplars - like Norway and Finland - they receive twice as much money as we do in the UK.

"So it's inevitable that if the Government doesn't put the money in, then parents and providers will have to subsidise it."

He said many childcare providers are reliant on fundraising and the work of volunteers just to stay afloat.

Under the current system, all three- and four-year-olds in England are entitled to 15 hours of free childcare a week. This is being extended to the most disadvantaged two-year-olds.

An independent study commissioned by the PSLA found that the average cost to a nursery of providing care to a three or four-year-old is £4.53 per hour.

But nurseries and pre-schools are funded by the Government at a rate of just £3.88 per hour - a shortfall of around 18%.

In other words, the Government money only covers four out of five children taking up the offer.

Mr Leitch added: "They give a set amount of money and we are absolutely aghast as to how they've arrived at that figure. It just seems to be a figure that is plucked out of the air."

A spokesperson for the Department of Education said: "This report has been totally overblown. It is nonsense to suggest that childcare has been underfunded.

"The cost of childcare is falling in real terms and we have increased annual funding for early education by over £1bn since 2010.

"We are doing more than any other government to tackle the cost of childcare, with a record amount of money going to support the youngest children.

"As a result of our plan for education more families than ever before are now eligible for free childcare."

But the mere threat of an increase in fees will be of grave concern to parents, most of whom will already be paying hundreds of pounds a month.

At Cherry Blossom Pre-School in Lewisham, South East London, mums and dads told Sky News what the impact of a rise in childcare costs could have on their households.

Father-of-one Gary Ginger said: "For me it would have a serious impact. I would probably have to consider downsizing my house or moving to a completely different area, even though there are two of us working."