But families could find that there isn’t a space available for their child even if they are eligible.
Annabel MacGregor, the chief executive at Raised In nurseries in Bristol, told The Big Issue: “There will be valid frustration from families who are desperate for this early education for their children but aren’t able to find the space. It’s been phrased as ‘you’re entitled to free childcare’, but the nuances of what that actually means in practice probably hasn’t been thought through.”
There are extensive waiting lists at nurseries – with MacGregor claiming that they are booked beyond 2027 and “families are contacting us to book a space before they are even pregnant.”
New research from Pregnant then Screwed has found that half of parents (48%) have not heard back from their childcare provider since submitting their code to access the scheme. Just one in five parents said that the process has gone smoothly.
MacGregor said: “We want to make sure that the sector and our staff are supported and expectations can be managed in a way that’s helpful to everybody. Of course we do want to take as many children as possible because we know that nursery is the best place for them, but I think there will be some families that are quite rightly frustrated and disappointed.”
The government has claimed that the free childcare scheme for two-year-olds will save parents an average of £6,500 a year once it is fully rolled out. But a third of parents told Pregnant then Screwed they will save less than £100 each month.
Joeli Brearley, the chief executive and founder of Pregnant then Screwed, said: “Many providers are increasing costs for sundry items and for childcare outside of funded hours as a desperate attempt to cover their losses from delivering these schemes. This is drastically reducing anticipated savings.
“The new benefit sounded too good to be true, and for many families, it will make little difference to their outgoings. Once again, parents are picking up the tab due to underfunding from the government.”
Danielle, a mother from Cheshire, explained: “My little one is two, and we received a letter last week to say that fees will be going up from £65 a day to £86 a day. We are now paying £1,490 a month for four days a week. I’m going to have to leave my job as I simply can’t afford this.
“The 15-hour funding doesn’t kick in until April, which will help slightly, but what do I do right now as I simply can’t afford it? We’re not going to benefit in the slightest from the new government scheme, in fact, we’re now worse off.”
There are also issues with accessing the scheme. One in 10 (11%) eligible parents still hadn’t received their code or couldn’t work out how the system worked by the end of last week. More than half (52.8%) say they feel stressed due to issues with the new funding schemes.
A quarter (25%) of early years providers said that it was likely they will start limiting the number of early entitlement places they offer by September 2025, while around a fifth (19%) said it is likely that their setting would have opted out of at least some of early entitlement offers entirely by this date.
Neil Leitch, chief executive of the Early Years Alliance, said: “These survey findings should send alarm bells ringing throughout government. With just weeks to go until the rollout of the extended offer, it is clear that despite the government’s continued promises, not all eligible families will be able to access the early years places they need.
“Years of sustained underfunding combined with a worsening staffing crisis and limitations on space means that many providers simply won’t be able to increase places to meet the surge in demand for the new offers, while others will have no choice but to limit the number of places they deliver under the expansion or opt out of the entitlements completely.”
At MacGregor’s nurseries, finding qualified staff is the most significant pressure. “Getting people in the door in the first place is proving increasingly challenging, especially qualified staff, so that’s probably the biggest pressure that we’re facing at the moment,” she said.
According to the Early Years Alliance, 86% of nurseries and pre-schools say that the upcoming increase in the national living wage will have a negative impact on their finances. Of those, eight in 10 (81%) plan to increase fees to mitigate this.
Low pay is a key reason why early years settings struggle to attract and retain staff. Raised In is committed to paying its staff real living wage, but MacGregor understands that it can be a struggle for others in the sector, especially smaller nurseries.
She explained: “We prioritise paying our staff at least a real living wage and more if we can. That’s not the case across the sector. And that is simply because the government funding doesn’t cover costs.
“I also think that there’s something about the wider narrative around early years which isn’t helpful. It’s the assumption that it’s babysitting or low-skilled work. That trickles down to staff and they start to almost believe that sometimes. We do still find incredibly passionate and talented people coming through. They’re just increasingly becoming those unicorns that we grab on to as much as we can.”
The sector is calling for the government to increase funding to properly support early years settings so that they can deliver on its promise to expand free childcare.
Brearley said:“If we are serious about making childcare work for families and the economy, then we need to be more ambitious. Unless the funding to providers increases, they will have no choice but to continue charging high fees to make up the shortfall.”
The Early Years Alliance wants increased funding and a clear strategy for recruitment and retention. Leitch added: “Simply put, this is the only way to ensure that providers will be in a position to deliver the affordable, accessible, sustainable quality early education places that families need.
“So as we approach the 2024 budget, it is absolutely vital that the government acknowledges and recognises the scale of the crisis we are in and takes definitive action to turn things around. Continuing to deny there is a problem is simply not an option.”
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