An Open Letter to the Department for Education and Olivia Bailey MP

Dear Minister,

We write to you as a campaign group representative of the independent early years sector; providers who, for decades, have formed the backbone of early education and childcare across the UK.

We are compelled to ask a simple but urgent question: How much more is this sector expected to tolerate?

The recent expansion of school-based nurseries, positioned under the government’s ‘Best Start’ agenda, was presented as a solution to address childcare deserts; areas where provision has historically been limited or financially unviable. However, the reality emerging across communities is starkly different.

Rather than complementing existing provision, school-based nurseries are increasingly being introduced into areas already served by established, high-quality providers. In doing so, they risk displacing those very settings that have sustained early years education for generations. A recent and deeply concerning example is Marham Village Pre-School in Norfolk, which is closing after more than 50 years of service, reportedly due to the expansion of school-based provision. This is not an isolated case, but part of a growing pattern affecting nurseries, pre-schools and childminders across the country.

At the same time, independent providers continue to operate under conditions that are, quite simply, unsustainable. Unlike their counterparts in Scotland and Wales, early years providers in England remain liable for business rates- costs which are, in many cases, increasing. These settings must also meet rising staffing costs, including wages, pensions and sick pay, without access to the additional funding streams available to maintained and school-based provisions.

All of this is being delivered against a backdrop of government funding rates which have failed to keep pace with the true cost of delivery. In real terms, the funding for three- and four-year-old places has significantly eroded over time.

As Neil Leitch, Chief Executive of the Early Years Alliance, has stated, “The sector is not sustainable at current funding levels”. Similarly, Tim McLachlan, Chief Executive of the National Day Nurseries Association, has warned that “You cannot expect private providers to deliver government-funded places at a loss indefinitely”.

These are not abstract concerns. They reflect the lived reality of providers who are making daily decisions about whether they can continue to operate. Repeated sector-wide cost modelling and provider-level calculations consistently indicate that current funding levels fall at approximately half of what is required to deliver high-quality early education, leaving settings with little option but to operate in ways that risk reducing provision to little more than warehousing children. This is not what parents want, it is not what providers want, and there is clear evidence that underfunded, low-quality childcare has profoundly negative consequences for children’s development and for society as a whole. We recognise that fully funding the true cost of delivery may present a significant challenge for government; however, at the very least, this must prompt an honest reassessment of the current universal offer, with serious consideration given to a means-tested subsidy model that better aligns public investment with need while protecting quality.

Given the above evidence, it is particularly disheartening to observe a growing narrative that positions school-based provision as inherently superior. For decades, the private, voluntary and independent (PVI) sector has delivered the majority of early years places in England, with over 95% of settings rated ‘Good’ or ‘Outstanding’ by Ofsted. To suggest, implicitly or otherwise, that this is no longer sufficient is not only inaccurate, but deeply disrespectful to a workforce that has consistently delivered high-quality care and education.

We do not oppose the expansion of early years provision where it is genuinely needed. However, we cannot support an approach that risks destabilising existing, sustainable provision in the process. We urge the Department for Education to engage meaningfully with independent providers before further expansion of school-based nurseries. In addition they need to ensure that new provision is targeted exclusively at areas of genuine undersupply. Furthermore we absolutely must address the disparity in business rates between England and the devolved nations for fairness and parity. Finally, the funding rates require an immediate review to reflect the true cost of delivery. We know the last government were
forced to admit that they were ‘knowingly underfunding the early years sector’. Many providers held the hope that a Labour government would address this. Instead, they have penalised us further. We would like to see recognition and active support for the the vital role of the PVI sector beyond platitudes and the odd visit from our local MPs. The success of any early years system depends not on the dominance of one model over another, but on a balanced, sustainable ecosystem in which different types of provision can coexist and meet the diverse needs of families.

Without urgent action, we risk losing not only settings, but the experience, flexibility and community connections that have long defined early years provision in this country.

Yours sincerely, Free Childcare UK, representing concerned providers across the PVI sector