One in four childcare providers could close as 30 hours free funding falls short

One in four childcare providers expect to close next year due to insufficient funding to subsidise the government’s flagship 30 hours’ free childcare offer, new research has found.

The study, conducted by campaign group Pregnant Then Screwed, found 92 per cent of childcare providers are undergoing financial difficulties due to the scheme. 

Some 96 per cent of the 266 childcare providers polled for the research say the government subsidy to run the 30 hours’ “free” childcare programme does not cover costs.

The study comes after the Organisation for Economic Co-Operation and Development (OECD) found the UK has one of the most expensive childcare systems in the world.

The latest research into childcare providers also found that 71 per cent say they have struggled to recruit new staff, while 90 per cent think childcare workers are poorly paid.

Joeli Brearley, founder of Pregnant Then Screwed, said: “Our research demonstrates that the government’s approach to childcare just is not working. The offer of 30 free hours sounds good on paper but, in reality, it is manifestly inadequate for the scope required.

“As it stands mothers get a year of maternity leave, with only nine months paid. So, there are two years when they either have to stay at home or bear the brunt of the high cost of childcare. With the government imposing 30 “free” hours on childcare providers from three years onwards – for just 38 weeks of the year – these providers are recouping costs from younger years. 

“This necessary action to stay in business is the key reason behind mothers being unable to return to work because of the high costs, further adding to the motherhood penalty and gender pay gap.”

Ms Brearley argued the government needs to create childcare infrastructure that “works for everyone” – ensuring that nurseries do not shut their doors but maintain a high standard of care so parents can simply set off for work without suffering the “burden of high-cost childcare”.

The research found 63 per cent of childcare providers think childcare workers are overworked – with 69 per cent arguing the dearth of skilled workers has had a detrimental effect on them.

Aceil Haddad, head of press at the campaign group, said: “The deficit in funding for the government’s 30-hours scheme means that earlier care is more expensive, or there are add-on costs for parents, eg, paying for lunchtime care, paying for every minute they are late after pick-up. 

“The high cost of childcare pushes women out of work as, in many cases, it is equal to or more than their income. Women out of work means they are not represented and assumptions are made about the role of women in work – ‘don’t hire her, she will leave when she has kids’ attitude.”

Last month, research by the organisation found almost a fifth of parents have been forced into quitting their jobs due to the extortionate cost of childcare in the UK.

The study found the high price of childcare causes financial anxiety in 84 per cent of households. Some 62 per cent said they have been pushed into working fewer hours due to the cost of childcare.