Nurseries have warned of fee hikes ahead of childcare extensions.

Nurseries say parents could face higher fees and even nursery closures due to insufficient funding before free childcare provision is extended.

On Tuesday, the government announced that early years funding in England would be increased by £2bn next year, to help support this. Planned rollout of 30 hours per week Government-supported childcare for all eligible under-fives from September.

This includes a 45% increase in the Early Years Pupil Premium Fund for the most disadvantaged children, to £570 a year.

But nursery leaders warn that the increase will cover the costs of rising National Insurance contributions and minimum wage staff. There will not be enough to do.

The £2bn uplift includes a £75m expansion grant, which the government says will help nurseries, childcare providers and other providers to deliver the 70,000 extra places needed from September.

But the National Day Nursery Association (NDNA) says the extra costs An increase in the minimum wage And next year National Insurance contributions could increase average nursery costs by £2,600 per employee, “crippling providers”.

The NDNA is warning that some nurseries will have to pass these increased costs on to parents in the form of higher fees.

And while it welcomes the increase in the Early Years Pupil Premium, the NDNA says the £570 is still only a fraction of the £1,455 pupil premium paid to primary schools.

Nicola Florey, owner of Cadzers, which has five settings in Salford, says she has seen a “huge increase in demand” for places since the childcare changes began.

“Our concerns are making sure that our staff have a fair wage. An increase in the national minimum wage is absolutely right,” she says.

“They work very hard and are under a lot of pressure.”

But she says employers’ National Insurance contributions are “growing significantly”, and so nurseries “have to get funding from somewhere”.

She wants to see an exemption for nurseries in England from business rates, in line with decoupled policies in Wales and Scotland.

Mrs Florey says her staff costs will rise by between £8,000 and £10,000 a month from April.

The recruitment and retention crisis is also still a major problem for the sector, with insufficient staff to meet demand.

“The foundation years are the most important years of a child’s life,” says Mrs. Florey.

“We’re making a huge difference, not just to kids, but to families. And it’s really important that we’re recognized as a profession in the education system.”

According to the Department for Education, an extra 35,000 staff and 70,000 places will be needed to meet demand next September.

Education Secretary Bridget Phillipson says the early years “has been my priority from day one”.

“By giving more children the opportunity to start school ready, we change their life chances, and every child’s life chances in the classroom,” she says.

But so did the regulator Ofsted Concerns expressed that many families struggle to access high-quality early childcare;

And the declining availability of places has not spread evenly across the country, with the North East, East Midlands, and Yorkshire and the Humber worst affected.

Ofsted says these “childcare deserts” are more likely to occur in low-income areas and areas of high child poverty.

The Department for Education says a 45 per cent increase in premiums for early years pupils will provide more support for families who are more likely to live in childcare deserts.

Sutton Trust chief executive Nick Harrison called it a “welcome first step” but said “much more is needed to level the playing field”.

The government-funded hourly rate for early years providers varies between local authorities.

On average, government funding rates will rise by 38p to £11.54 for under-18s, by 28p to £8.53 for two-year-olds, and by 24p to £6.12 for three- and four-year-olds.

Neil Leach, chief executive of the Early Years Alliance, says the new funding rate “fails to even come close” to covering the costs. will be”.

“Countless nurseries, preschools and early childhood educators will be left with no choice but to raise costs, reduce spaces or close their doors entirely,” he said.

NDNA chief executive Purnima Tanko says the funding cuts could lead to higher nursery fees and fewer places available while the government provides more funding for childcare. are

“All children deserve the best start in life and these rates do not reflect the high quality of care and education they receive,” she said.

“The combination of all these factors will be the last straw for some nurseries, resulting in more settings closing rather than expanding to meet the expected demand.”

NDNA says it has seen a 50 percent increase in closures in the past year, particularly in deprived areas.