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News - 21 June 2013

Nurseries 'lose £700 a year on free places'

The National Day Nurseries Association's (NDNA) annual survey of childcare businesses suggests that English nurseries lose an average £700 a year through shortfalls in grants for free pre-school places.

Three and four-year-olds are entitled to 15 hours' free childcare a week, but providers accuse local authorities of holding some of the funds back.

Chief executive of the NDNA Purnima Tanuku said her association's research, based on responses from 196 nurseries, suggested many local authorities were withholding funds meant for frontline nursery provision of these places. She told her association's annual conference in Peterborough: "This is a major, major issue for us moving forward."

Childcare minister Liz Truss said she was collecting data on the payments, and she told members at the conference she had heard repeated concerns about the money not reaching the frontline. She said:
"I've heard a lot of reports on this from nurseries. There clearly is unfairness in the system about the different money that different local authorities take.

Lavinia Newman, Founder of ABDS and a qualified Mediator comments:
“The NDNA says the average hourly rate per child in May this year was £3.71 - up a few pence from last year's rate of £3.66. That there is a shortfall in what is known as the Nursery Education Grant is not a new complaint - but it is clear that the scale of the reported loss has increased dramatically in recent times.”

The reported loss faced by nurseries offering free places has risen from £530 a year ago to £701. Many nurseries charge extra fees to parents with children on full-time places to make up the difference.

Shadow education minister Sharon Hodgson, who also spoke at the conference, said the problem was that the money was not protected and went into a budget that was cut by 40% since the start of the coalition government.

If you need any help and advice on Nursery Schools and or starting up a new business contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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