EARLY Years settings in Salisbury face big financial problems due to lack of funding, a city's nursery has said.

Cheryl Hadland, Managing Director and CEO of Tops Day Nurseries has raised concerns over under-funding following a report shared by the Institute for Fiscal Studies (IFS) and Nuffield Health.

A number of childcare providers across the country are worried they may have to close their doors for good after the study shows that more than double the amount of nurseries are running at a significant loss now compared to before lockdown.

While childcare settings were allowed to open to all children from the start of June, by the start of summer holidays demand for childcare places remained 70 per cent below pre-crisis levels, the report states.

Even by mid-July, after lockdown ended, childcare use was only around 30 per cent of its pre-crisis level.

Mrs Hadland said: “Tops Day Nurseries have remained open throughout the pandemic at our hospital based nurseries although all 30 day nurseries have now re-opened.

"We have survived the pandemic so far thanks to furlough, no business rates, cutting all our costs to the bone, and receiving local authority funding for children not in attendance, but we still made a loss in August.

"Rates paid by the government/local authorities for funded hours are at least 20 per cent under the cost to provide these, so the fundamentals of the sector is currently not sustainable, significantly limiting our ability to pay staff anything like what their responsibilities, skills and qualifications should be rewarded with. It is time that the vital education and care provided by early years professionals is rewarded fairly."

She added: “There is a misconception that the ‘Free childcare’ advertised by the government and councils for many years is actually free. It is not free, it is subsidised by low paid staff and struggling employers. Of the funding provided by the Government, local authorities provide nurseries with around £4 per hour per funded child, but it costs at least £5-£6 per hour to provide childcare and education, and more in high property value areas.

"As time goes by, the sector is running into more and more financial difficulty. Some funding rates have been held for 5 years and in some cases such as Bournemouth we have even suffered a drop in the amount of funding we receive. Funding must reflect staff costs, the biggest cost for any childcare provider.

"The lack of investment from the government into the sector means the staff are underpaid for the exceptional work they do in educating the next generation. We desperately need society and the government to recognise that early years education should not be funded on extremely low rates but must recognise how valuable the entire sector really is."

Salisbury MP John Glen said: “The government recognises the challenges facing the Early Years sector as a result of the pandemic. That is why we introduced a comprehensive package of support which helped nurseries through the past few months.

"As well as being eligible for the Coronavirus Job Retention Scheme and Bounce Back Loans, many nurseries are also benefitting from 100% Small Business Rates Relief for 2020-21. Childcare providers not covered by this relief were also able to apply for discretionary funding from Wiltshire Council as part of the government’s £600m scheme.

"Nurseries have an important role to play in helping families get back to work and we will be doing everything we can to continue supporting the sector.”