Julia Lopez, the Member of Parliament for Hornchurch & Upminster, has called on the Government to address the unsustainable pressures facing early years providers in her constituency.
Following a critical meeting with local nursery leaders, Mrs Lopez has written to the Education Secretary, Bridget Phillipson, highlighting the severe impact of recent policy changes on the sector.
In her letter, Mrs Lopez highlighted the challenges caused by increases in National Insurance Contributions (NICs), which have forced many providers to raise fees or reduce services. She emphasised that these measures are placing an unsustainable burden on businesses.
"One provider in Havering reported that the combined impact of NICs and minimum wage increases will add £30,000 per month to her payroll. This is simply unsustainable, particularly for those delivering the Government's funded childcare hours," Mrs Lopez wrote.
During her meeting with 20 women leading early years providers in Havering, Julia heard firsthand about the funding challenges exacerbated by the Government’s October Budget.
Providers consistently highlighted that the funding rates are inadequate to cover the true cost of delivering 30 funded hours of childcare. The National Day Nurseries Association (NDNA) has reported that funding rates have increased by just 3.3%-4.1%, while statutory minimum wages will rise by 6.7% to 18%.
Mrs Lopez also raised concerns about recent revisions to the guidance on charging for extras, which have added to the strain on providers. Many lack the facilities to store alternative food provided by parents, with environmental health restrictions preventing them from doing so. This could force parents to remove their children during mealtimes, undermining the service and making it harder for parents to return to work.
"The proposed changes set to take effect in January 2026 will only exacerbate these challenges. Providers have warned that they may be forced to close rather than deliver inferior services," Mrs Lopez warned.
Julia also highlighted the disparity in funding support between public sector school-based providers and private sector providers. School-based providers receive compensation for NICs increases and exemptions from business rates, while private providers do not. This approach, she argued, unfairly hammers the private sector, which plays a crucial role in providing childcare.
Mrs Lopez also tackled concerns relating to how the childcare is referred to by the Government:
"There is widespread concern about the language surrounding 'free' childcare. Referring to it as 'free' is misleading and distorts expectations. The term 'funded' would more accurately reflect the state's contribution without suggesting that the service incurs no cost to providers," She stated.
Mrs Lopez concluded her letter by urging the Government to reconsider these policies to ensure the long-term sustainability of early years provision and to prevent further strain on an already struggling sector.
