Simon Burman, who runs the Pre-school Centre in Richmond, Surrey, with his wife Nikki, stopped offering the free entitlement to parents of three-and four-year-olds in September 2006.
Mr Burman has been talking about his experiences in response to the reaction from those early years providers who have contacted Nursery World to express anger and dismay over the new Code, which many have found to be confusing and restrictive.
He was the first provider in his area to withdraw from the funding because of what he called increased 'interference' in the running of the business and because the grant only covered one-third of the cost of fees (News, 20 July 2006).
Four years on, the lack of the offer of free places has driven only two or three families to leave.
Mr Burman said, 'We saw the writing on the wall back then and have been amazed at the personal anguish providers are having over this issue. If it is unworkable and unviable, then you have to pull out.'
After monitoring the situation for more than six months, he said he was 'fairly confident' that the nursery would not lose parents.
Mr Burman said he noticed that most parents would wait a couple of months before they cashed cheques to reimburse them with the grant - some for several hundred pounds. 'The funding was not the issue. We felt that this proved that parents were coming to us for the service we offered.'
Because the council did not issue the grant until half-term, parents were invoiced in advance, then reimbursed by cheque for the difference between the cost of sessions and the grant.
Acknowledging that the 2006 Code stated the entitlement should be 'free at the point of delivery', Mr Burman said, 'If we had stayed in, we would have continued to invoice parents and refund the difference, because that was the only way we could afford it. So we would have had no option but to pull out anyway.'
In fact, he said, the biggest threat to the nursery remained the increasing number of parents choosing to send their children to nurseries attached to local state schools when they turned three. 'Whether we were being funded or not made no difference. We have a cash crisis every September.'
He also said there had been a dramatic increase in the number of parents using childcare vouchers. 'We get more parents asking about vouchers than funding. They offer parents real choice.'
He added, 'I have full sympathy with nurseries in [deprived] areas where they feel they could not leave. It is hugely dependent on your setting and location, but I think 80 per cent of nurseries would survive. Parents will make a sacrifice for a good nursery. The private sector ought to be brave and pull out so people realise this is not 'free' education and care.'
He said the Government should be directing more money to poorer areas. 'Money is wasted in areas where parents can afford it.'
