The average level of nursery education grant funding went up to 3.41 an hour from 3.30.
Although local authorities were required by the Government last year tocarry out a cost analysis of childcare provision to determine gaps infunding, the report said that 61.5 per cent of nurseries could not meettheir costs - the same number as last year.
Author of the report and economist at Laing & Buisson, Philip Blackburn,predicted this would lead to 'heavy casualties' in the nurserysector.
'Although an increase of 11 pence an hour is in line with inflation, noreal increases in the entitlement means there has been no change to thecurrent loss-making position reported by most nurseries,' he said.
The recession is also starting to have an impact, with 53.5 per cent ofthe nurseries surveyed predicting their businesses would suffer thisyear.
The National Day Nurseries Association is calling for interim fundingfor the nursery education grant. Chief executive Purnima Tanuku said,'Although there have been recognised issues with funding for the freeentitlement, we are concerned that there does not appear to be astep-change in funding levels that providers need.'
She added that despite reforms to be brought in, such as the singlefunding formula, an increase of 11 pence an hour was not sufficient tocover providers' costs.
'NDNA is urging Government to consider additional interim funding,perhaps through allowing flexibility in existing early years fundingstreams.'
- Further information: 'Children's Nurseries 2009' costs 595 fromwww.laingbuisson.co.uk
