First phase of the biggest-ever expansion of childcare starts this month, giving working parents of two years olds access to 15 hours a week. But can the estate cope with tens of thousands of additional children

As the Government announces the launch of the first phase of the biggest-ever expansion in early years childcare, there are continuing concerns over the ability of nurseries to expand their buildings to accommodate tens of thousands of additional children.

From April 1 working parents of two year olds are able to access 15 hours a week of government-funded childcare as part of a plan to help families – freeing thousands of couples from having to choose between having a family and a career, as over 150,000 children are on track to secure government-funded places from this month.

And, by September 2025, the full rollout will be completed, with working parents able to access 30 hours from the end of maternity leave to when their child starts school, saving parents an average of £6,900 a year.

But the move has led to concerns over staffing levels and the ability of the nursery estate to grow in order to meet the anticipated demand the measures will bring.

This is despite a £100m government capital funding pot, announced in October last year, to support an increase in physical space for early years and wraparound care.

Neil Leith, chief executive of the Early Years Alliance, said, while welcome, the cash would not help nurseries unless underpinned by a robust workforce plan, adding: “The fact is that all the physical space in the world won’t achieve anything if we don’t have sufficient early years staff to deliver places and meet increased demand from families.

“For years now, the sector has urged the Government to tackle the recruitment and retention crisis in the early years, calls that have continued to fall on deaf ears.

“Now it is vital that the Government ensures we have the infrastructure in place to deliver the places it has promised to families – but while supporting providers to increase physical capacity is a part of this, it is only a small part.

“As such, we continue to urge the Government to focus its efforts on building and sustaining a strong, stable early years workforce by ensuring fair rates of pay through adequate funding rates, professional respect and recognition, and clear career progression. Anything less, and parents around the country looking forward to accessing the extended early entitlement offer next year are likely to be left sorely disappointed.”

The new rules are also impacting on the real estate market, with increased interest among investors and nursery operators in acquiring both single assets and larger nursery property portfolios.

During 2023, Christie & Co brought 236 day nurseries to the market and buyer interest was strong, which continued to drive the market.

And it predicts the trend will continue as the early years funding expansion gets underway.

Nick Brown, director and head of brokerage for childcare and education at Christie & Co, said: “Key challenges are sure to continue throughout the sector this year, but there is definitely a more-optimistic feeling around the 2024 market as we begin the year as we are already witnessing a healthy appetite and demand for high-quality assets across the country, which has resulted in a strong pipeline of deals agreed already for the first quarter of  2024 and beyond.”

In response to comments on staffing, in a statement this week the Government said it was introducing measures to boost the recruitment and retention of childminders, launching a major national recruitment campaign, and providing over £400m of additional investment to uplift funding rates in 2024-2025.

On top of this, the Government will increase rates over the next two years by an estimated £500m, the Chancellor confirmed at the Spring Budget.

And Prime Minister, Rishi Sunak, this week said he was confident that the childcare sector is ready to deliver the offer and make sure parents have the childcare they need.

He added: “Last year we promised the biggest-ever expansion in childcare provision this country has ever seen, and today we are delivering on our plan with 15 hours of free childcare for parents with two year olds.

“We want to give working families the peace of mind that they will be supported and our full expansion will save parents £6,900 a year – helping to build a brighter future for families and help to grow our economy.”

Applications for the first stage of the rollout from April are now closed, but parents who have already registered can continue to take up places from April.

And the number of parents taking up places is expected to continue to grow by tens of thousands over the coming weeks, and the government is expected to provide a formal update on take-up in the middle of April.

Chris McCandless, chief executive of nursery provider, Busy Bees Europe, said: “We welcome the Government’s continued commitment to expanding support for early years education.

“The increase in funded hours will help working families and give more children the best start in life, and we’re really pleased that the rollout has been accompanied by the clarity on future funding rates we needed to invest in creating the additional capacity required in our centres.

“We’ve already seen a significant increase in interest in our nursery places in recent months from parents looking to make use of the funded hours, and expect to welcome more children to our nurseries this year and in subsequent years as the scheme expands further.”