Essex nursery 'closes because of universal free hours scheme'

When ministers pledged to double the amount of free childcare for working parents, they never dreamed it could lead to some top nurseries closing.

But just over two years on, that is exactly what is about to happen.

Fidgety Fingers in Essex, one of many nurseries which says it cannot make government funding rates stretch over 30 hours, will shut on Wednesday.

The government says it has boosted the rates it pays councils to fund the scheme, including Essex County Council.

The Department for Education is sure that the 30 hours scheme, which is due to start in September, will be a success, like it says its trial scheme has been.

But the popular pre-school, which has been repeatedly rated outstanding by Ofsted, has only just broken even over the last few years like many nurseries and pre-schools.

The children make full use of its expansive garden, driving around in a make-believe bus, shaded from the sun by the maternal arms of a beautiful apple tree.

Based on the same site as owner Jackie Neagle's home, it has a familial feel, with all the children calling the nursery staff "auntie".

"I've never had a parent look at the nursery who hasn't asked for a place," she says.

Fidgety Fingers caters for pre-school children, with all of those aged three and four being entitled to 15 hours free childcare a week.

But from September, those from families with working parents will be entitled to 30 hours free care/early years education per week - just so long as their parents do not earn more than £100,000 a year each.

Like many other nurseries, the rate Jackie receives from the government via Essex County Council for the 15 free hours does not cover her staff costs or overheads.

When she opened 10 years ago, the money just about worked, she said, but as the bills and overheads have increased it no longer stretches that far.

And in recent months the rate the nursery is paid has been reduced to £4.21 an hour from a high of £4.61 several years ago.

"Currently we make a loss of £1.95 an hour per child, so we ask for voluntary contributions of £30 per week per child," she says.

Although parents always say they are willing to pay that, she says, they may only be able to do so for a little while.

"Life happens. You can't run a business on voluntary contributions."

But as nurseries are not allowed to charge any top-up fees - the free hours are advertised as free and must be at the point of use - that's exactly what she is having to do.

Many nurseries make up the shortfall by charging much higher rates for the additional hours, above cost for extras such as lunch or nappies, or by forcing parents to start at a certain time or take their hours in a certain way, she says.

"I am not prepared to charge £45 for an additional hour. I wouldn't be able to sleep at night.

"I am an honest person. I don't want to run a business dishonestly, to rip people off, but I do need to make a living."

Fidgety Fingers has been offering additional hours, but these are charged at £6.50 per hour.

But when the number of free hours is doubled, the nursery will not be able to charge for additional hours, unless it dramatically increases its opening hours and, as a small set-up with only a small number of staff, that will not be possible.

So after three decades of working with children, Jackie has reached the point where she feels unable to continue.

Her families have of course been shocked and disappointed, says Jackie.

One mother, Jordana Mould, whose third and youngest child, Rufus, is at the nursery, said: "Nothing will compare to Fidgety Fingers. It has become more than just a nursery for my family.

"However, I completely understand why Jackie has to close the doors.

"How can she run Fidgety Fingers on voluntary payments from parents every month?"

Ironically, Jackie says she started thinking about closing the nursery when it received its fourth outstanding rating by Ofsted.

"I realised I am not going to be able to reward my fantastic staff with a pay rise."

Despite the low pay of staff, children who have attended the nursery go into Reception a year ahead of their classmates on average, says Jackie.

Essex County Council said it had been working with local providers on their decisions on whether to offer the extended hours.

And it pledged to support any local families affected by the closure of this nursery.

The government says it has boosted funding rates in Essex for next year from £3.89 to £4.47 per hour.

The council is entitled to use a proportion of that money for its administration costs and like all local authorities has had to make huge budget savings in recent years.

Childcare minister Robert Goodwill said the extra free hours were funded nationally by a £1bn boost to raise rates paid to local providers.

He added that the rates were based on a comprehensive review of childcare costs and took account of current and future pressures.

But for the staff of Fidgety Fingers, that's not how it feels on the ground.

Jackie says: "The Early Years sector is very good at trying to patch up and make do... but for as long as we all try to do that, the more the government doesn't have to do anything.

"It's great for parents, but my staff who are earning an average of £8.50 an hour are subsidising parents who are earning up to £200,000 a year.

"And when you think about that, it just brings it all home."