The challenges that small firms providing childcare face have been highlighted in new research published by FSB. The report, Handle with Care, examines the impact that the Government’s 30 hours’ free childcare offer, as well as increasing operating and staff costs, is having on the sector.
Interviews with FSB members who run nurseries, pre-schools and childminding businesses across England highlighted a significant shortfall between the amount of local authority funding received for the 30 hours’ scheme and the fees the provider recoups from parents.
National Living Wage rises and employer contributions to auto-enrolment pensions are exacerbating this shortfall, halting investment and leaving many providers reconsidering their future. “Childcare providers we spoke to said they would prefer to shut their doors than provide a service that wasn’t high quality,” said FSB Education Policy Chair Jane Walton.
FSB is calling on the Government to increase the hourly rate paid to these providers, and give them a 100 per cent business rates relief scheme – as is now the case in Scotland, following successful lobbying by FSB.
The full report can be viewed here