Just under half of the 127 PVI providers who took part in the online questionnaire offering a combined total of 4,500 childcare places said that they would be forced to opt out of the free entitlement scheme or close their nurseries to comply with the rules of the Code of Practice and cover shortalls in funding.
Out of these nurseries, nine in ten said they would take this action by September.
Dawn Nasser, secretary of Save Our Nurseries, who runs a nursery in Lewisham, told Nursery World that the findings from nurseries in 65 local authorities in England squashed the usual argument that only nurseries in the south and south-east of England were unable to cover their costs.
More than 20 per cent of respondents were from small to medium-sized nursery groups offering around 120 to 150 places.
Ms Nasser said that responses received from nurseries considering opting out or closing included settings in five authorities that were among the first pathfinders to offer the flexible free entitlement - Hertfordshire, Rochdale, York, Derbyshire and Worcestershire. She said this clearly showed that implementing the extended flexible entitlement was not working.
Forty-seven per cent of providers questioned admitted that they were not legally meeting all the terms and conditions of the Code.
Just under half of these settings said they were not offering the free entitlement completely free at the point of delivery.
Forty-five cent of respondents said they thought that their local authority was knowingly 'turning a blind eye' to the rules of the Code, effectively allowing nurseries to charge a 'top-up' fee. One nursery owner said, 'I think the council are prepared to turn a blind eye/bend the rules because they know they will not be able to supply the places if they shut us all down.'
Ms Nasser said that nursery owners were also facing other pressures, among them rent increases from landlords and the rise in VAT.
Save Our Nurseries is carrying out more research with local authorities to try to find out how many providers have closed or left the free entitlement scheme since September, when the Code was first introduced.
Ms Nasser called on the children's minister to include a representative from the Save Our Nurseries/Free Childcare campaign and the Montessori Schools Association on the early years steering group to ensure that the views of small private providers and nursery chains were heard.
She added that representatives from the private sector should be able to contribute to drawing up the Government's review into the Code of Practice, to be launched in the next few weeks.
'If there is a consultation, there needs to be direct input from providers so that the questions are easy to understand for nurseries and so that the right questions are asked. We're asking for a review that's completely honest,' she said.
Comments from PVI providers
- 'My LEA has found sensitive ways around the wording of the terms and conditions, which is helping PVIs to bide their time in the hope that the Code does get suspended.'
- 'We have to fit children in groups of fee-paying children or we would go bankrupt.'
- 'We are breaching the spirit of the Code by avoiding taking children whose parents want completely free places - 96 per cent of our children attend at least 25 hours a week and enjoy many activities which would be denied to those on a free place.'
- 'We make sure parents know that we cannot operate unless they purchase an extra 15 minutes each session, for which they pay the equivalent of a "top-up" fee.'
- 'At present we are allowed by our local authority to ask parents for a voluntary donation because several larger providers threatened to withdraw.'
- 'Our LA has delayed enforcing all conditions so far.'
