Nursery owner calls on PM to honour pledge on top-up fees

Patricia Banks runs Piggy Banks Nursery in Farnham, Surrey, which is graded outstanding by Ofsted. She says she has lost £20,000 in the past year because the funding for the free entitlement for threeand four-year-olds does not cover the nursery's costs.

She wrote to Mr Cameron in April expressing her concerns on the planned extension to 15 hours and asking for the Conservatives' views, which she said 'could make or break' her nursery.

The grant from Surrey County Council is currently for £3.78 an hour, but Mrs Banks said that a survey by the council put the true cost of a free entitlement place at more than £6 an hour.

Earlier this month, education secretary Michael Gove confirmed that the entitlement for three-and four-year-olds would rise to 15 hours a week in September (News, 10 June).

Mrs Banks told Nursery World, 'I've heard of two nurseries in our area closing this week.

'I feel very frustrated. We face losing our house and our business. We have a high staff ratio and it's what makes us outstanding. The nursery education grant is for good-quality care. I refuse to run a sub-standard nursery.'

Mrs Banks said she has been told by local authority advisers that she should make staff redundant and increase fees to parents.

'I have four staff at degree level earning £7.25 an hour. Why should I make staff redundant? I have 16 full-time staff. When the funding goes up in September to £4.03 an hour, I'm going to pass on the 25p increase to salaries. It's nursery staff that are losing out. I can't keep upping our fees, because I'll lose parents and parents are cutting down on hours to save money because of the recession.

'If you want a single funded system, I think you should give parents x amount of money as a voucher towards fees.'

Mrs Banks said she felt the restrictions in the Code of Practice would 'destroy many good nurseries. We have made great strides in changing childcare, and I would love to go forward in future years. Whether we close or not depends on the restrictions created by Government.'

Extract from a letter from Sue Dennis, the Office of David Cameron, to Patricia Banks, 27 April 2010

'I am writing on behalf of David Cameron to thank you for your letter of 22 April in which you enquire about our policy on nursery care ...

'Even before we entered a recession, many nurseries found it difficult to provide high-quality care on the limited amount they were receiving ...

'We believe that at present there is not a level playing field among nursery providers, and that the financial pressure on private and voluntary providers is simply not sustainable.

'We supported the creation of a fairer funding formula ... but the recent decision to postpone the implementation of the Early Years Single Funding Formula comes after the failure to devise formulas that were fair and adequately covered all the costs different providers faced. Both maintained and PVI nurseries complained.

'The recession is a difficult time for private nurseries, and so urgent action is needed to ensure our childcare sector is sustainable. It is important that the Government now suspends the 2006 Code of Practice until funding formulas have been sorted. That means allowing nurseries to charge parents supplementary fees as a temporary solution. Not doing this would leave some families facing a lack of adequate childcare provision in their area.'