It comes as a new survey found parents’ nursery fees could spike by an average of 10 per cent as a result of employers’ national insurance contributions (NIC) increasing from April.
They urged the Chancellor to reimburse nursery NIC increases on publicly-funded places and exempt them from business rates.
Owners are now urging the Government to increase funding as they face going out of business over what some branded a stealth tax.
Laura Weston, chair of Hartwell Nursery and Preschool in Northamptonshire, fears the extra NIC costs could force them to close“We can’t put our fees up at all. Any kind of impact, whether it’s national insurance or minimum wage that is going up will impact our profits,” she said.
“It’s a massive worry. We really don’t know we’re going to survive this. It’s just not sustainable. We’re going to see loads of people going out of business again.”
Funding rates are due to rise by an average 4 per cent, but two-fifths of nursery businesses surveyed by the NDNA didn’t know their new rates, with 96 per cent saying they’ll have to increase fees.
Laura Weston, chair of Hartwell Nursery and Preschool, in Hartwell, Northamptonshire which employs seven staff looking after up to 20 children attending, fears they could shut by summer.
“We had a council inspection last year, and they made us aware that as much as we can add a consumable charge [for items like nappies] to our parents, for parents whose children are funded we can’t enforce that charge.
“We can’t drop staffing, because we then wouldn’t have enough staff per child for the ratios. So unless we can magic fundraising from somewhere, it will be closure.”
Rachel Wilkinson, the managing director of Green Gables Montessori Nursery in Harrogate, said the NIC rise is a ‘stealth tax’While not at risk of closure, the nursery, which looks after 72 children and has 28 staff, needs to raise fees by 12-15 per cent from April to meet the added NIC cost.
“It’s another stealth tax for nurseries. We’ve been squeezed so much over the years there’s nothing left to squeeze. We’re already wrung dry.
“I’d like some respect from the Government for what we actually do – for bringing up the next generation and preparing them for school.”
‘NIC hike is unfair on parents’
Ceri Powe, 33, from Swansea, has been told the fees at his three-year-old son’s nursery are increasing by £3 a day to cover the NIC rise.
He and his wife had already dropped the number of days their child, Arlo, attends nursery from four to three due to the cost of fees, with the family facing bills of £900 a month.
They now receive 30 hours free weekly childcare, but Mr Powe, who works in a contact centre, believes it’s “unfair” parents are paying more to cover employers’ national insurance charges.
Ceri with his son, Arlo. He said the increase in nursery fees from the NIC increase is a ‘shock’“The national insurance increase is going to mean other businesses are going to push on other costs elsewhere,” he said.
“Compared to other parents’ situations who are paying their full bill and their prices are going up I’ve probably got it a bit better than them.
“But at the same time, when you get an incentive that brings the childcare bill down, and then you balance your household budget around that, for it to go up it is still a shock.”
“If a parent comes to me and says, I want four days a week of childcare, and a parent comes to me with their 15 hours and says, I just want two days a week of childcare, I’m having to become more selective in who I choose,” he said.
Neil Leitch, CEO of the Early Years Alliance, said without urgent Government action April’s NIC changes will be “catastrophic” for providers and families.
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Read MoreLydia Hodges, head of Coram Family and Childcare, said disadvantaged children with Special Educational Needs and Disabilities and families on low incomes were first to be “squeezed out” by rising costs.
“That’s why despite having to take tough decisions to fix the foundations of the economy, we are raising early years funding by over £2bn next year, including a targeted £75m grant to support the increase to 30 government funded hours from September.
“We will continue to work closely with the sector to make sure the funded childcare hours remain fair and accessible to all parents.”
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