More nurseries could close 'if free nursery care is extended'

More nurseries could close if the Government extends free child care entitlement, the Federation of Small Businesses (FSB) has said.

The FSB said that many nurseries already struggle to break even and even report losses under the current Government-funded system, which requires nurseries to provide 12.5 hours a week of free sessions. The Government plans to extend free entitlement to 15 hours per week in 2010.

The FSB said that funding in some local authorities is insufficient to cover increased nursery costs and is calling for a Regulatory Impact Assessment of the plan.

Colin Willman, FSB education and skills chairman, said: "Most nurseries are not out to make huge profits, but at the moment, many are struggling just to survive because they are being asked to provide a service below the cost of delivery.

"This is no time to make it harder for care-providers to do their job."

Liz Roberts, editor of Nursery World, told More Than Business News that there has been an increase in the number of nurseries closing and cutting jobs.

"Nurseries have been hit by under-funding for the free entitlement for some years, with many subsidising the cost of providing the sessions," she said. "The extension - combined with tough economic conditions - could drive some out of business."

"The Government needs to provide funding at a level that covers the cost of high-quality nursery education or parents and providers will suffer the consequences."