Long-term future of nurseries in London under threat

  • By Gemma Kappala-R...

The long term future of many nurseries in London could be at risk under government plans to reform early years funding.

While London Councils, which represents the 32 boroughs and the City of London, is positive about government plans to invest money in childcare, it has concerns about the impact of funding reforms. 

The early years funding formula proposes that all childcare providers in a borough receive a universal basic funding rate to deliver free childcare places. 

London Councils is concerned because the London childcare market is varied and different childcare providers have different operating costs when delivering free childcare places. A funding system that does not recognise variations in running costs between childcare providers risks impacting the long term stability of childcare available in a borough, including borough-maintained nurseries. 

Cllr Peter John OBE, London Councils’ Executive member for children, skills and employment, said:

“More than 140,000 children across the capital benefit from free childcare provided by maintained nurseries. These places help support some of the most deprived children in London, particularly where there is a lack of alternative childcare options.

“Setting a universal base rate of funding for all childcare providers will result in many nurseries losing out if they have higher running costs.

“Quality early years education enables children growing up in deprived areas to catch up with their more affluent peers by the time they start primary school. It would be huge concern if the new early years funding formula resulted in nurseries reviewing or cutting back the service they provide to families that need it most.”

The introduction of the government’s offer of 30 hours’ free childcare for working parents in April 2017 is likely to see soaring demand for nursery places across the capital, which is why London Councils is also calling for government to protect early years funding for boroughs that are set to lose out under current proposals. 

London Councils is also keen to ensure that boroughs have powers to respond to local market conditions and can transfer funding between different funding pots when needed, without having to contend with restrictive funding caps. 

To read London Councils’ consultation response on the early years funding formula in full, click here.

London Councils has also written to the Education Secretary, Justine Greening, to highlight concerns raised in the consultation response.


Notes to editors:

The government will provide supplementary funding of £55 million a year to local authorities for maintained nursery schools for at least two years. There has been no commitment made beyond this time.