The Alliance warns that where the nursery education grant does not meet providers' costs and sustainability is under threat, it could 'endanger the whole childcare strategy'.
Most of those thinking of withdrawing from the NEG are private providers.
Although 62 per cent of respondents to the Alliance's membership survey said that they were coping with levels of nursery education funding, chief executive Steve Alexander said he feared rising costs, the drive to improve quality and the implementation of the Early Years Foundation Stage were likely to threaten long-term sustainability for providers.
Recommendations put forward by the PLAinclude: a universal funding formula to ensure that levels of nursery education funding better represent the costs incurred by individual members; a minimum amount to be ringfenced for early years from the Direct Schools Grant; nursery education funding to be increased appropriately year-on-year; and the flexible offer to be financed realistically. It also calls for a national review building on the report's findings to analyse current regional variations, differing business models, and projected costs.
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