EXPERT COMMENT: Pre-school Learning Alliance underfunded nursery places

Iain McMath, CEO of Sodexo Benefits and Rewards Services, a leading provider of childcare vouchers in the UK, comments on the Pre-school Learning Alliance report in to underfunded nursery places:

“The nursery sector is currently under intense pressure, with 49% of nurseries fearing they will be forced to close as a result of the government’s most recent plans to improve childcare provision. The government’s intention to increase free childcare for 3-4 years olds from 15 hours to 30 hours per week is an unrealistic target, with 58% of nurseries saying this would have a negative financial impact on their business. This is a very real problem, with many respondents already stating that they are planning their close. Nurseries have admitted that the only way to plug the shortfall in funding for each free childcare place is to increase the expense on paid childcare.


Childcare is currently funded by many working parents through employer-supported Childcare Vouchers, however this system is due to be replaced by Tax-Free Childcare (TFC) which will begin its roll out in early 2017. Claims that TFC will save parents up to £2,000 per year are misleading, with 66% of households estimated to be worse off under this new scheme, according to a recent study by Sodexo Benefits and Rewards Services. Furthermore, along with increased nursery costs, it is likely that this could make childcare – outside of free government subsidies – very hard to afford.


For parents that need help right now, the existing Childcare Voucher scheme can currently save each parent up to £933 per year, contributing £1,866 to a family when both parents are working – this can equate to a possible joint saving of more than £25,000 over the 15 year duration of the scheme. As such, parents who are looking for help with their staggering childcare costs would be best served to sign up for Childcare Vouchers now, before they are closed to new entrants in April 2018.”