FSB warns of crisis in nursery care

The Federation of Small Businesses (FSB) today warned that nursery providers face severe hardship or even closure because of inadequate government funding for free nursery places. This could deny many families much-needed childcare.

Under the 2006 Code of Practice on the Provision of Free Nursery Education for Three and Four year olds, nurseries are obliged to provide 12.5 hours of free nursery education.

The FSB has sought legal opinion and has warned that the Government urgently needs to measure the impact of the Code on nursery providers.

The Code obliges nurseries to provide the education at rates set by their local authority. However, those rates are frequently falling way below the cost of provision, pushing many nurseries towards closure.

Colin Willman, FSB Education Chairman, said:

“Both central and local government is failing to recognise the true cost of this Code for nurseries and they appear to be blaming each other for the consequences. This is unacceptable. They should carry out an urgent impact assessment to review the growing hardship this system is causing.

“In the meantime we will provide the Government with our own evidence of the negative impacts of this scheme.

“What we are seeing time and time again is small businesses being compelled to subsidise Government social policy and act as an extension of government departments. At the very least small businesses deserve to be adequately compensated. The fact that many nurseries are having to consider closure in the wake of this policy is disgraceful.”

ENDS

Notes to Editors:

1. The FSB received legal advice on the 2006 Code of Practice on the Provision of Free Nursery Education for Three and Four Year olds. It was advised to urge the Government to conduct an impact assessment (IA).

2. There was an Early Day Motion (EDM) in Parliament on this issue, with 94 MPs backing the FSB’s call for an IA. For details of the EDM: http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=31803&SESSION=885.

3. The FSB is Britain’s biggest business organisation with over 205,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

4. Case studies available on request.