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The Early Years Alliance has issued a comment on the IFS , which argues that "higher-than-expected inflation on top of substantial rises in costs in recent years means that providers’ resources will be particularly squeezed going forward."

The sector received no additional investment at this year's Autumn Statement

Commenting, Neil Leitch, CEO of the Early Years Alliance, said: "The government has argued that without a plan for education, there is no plan for economic growth – but unless ministers finally wake up to the fact that education starts well before, and goes on long after, the school gates, any future policy is doomed to fail.

"As the IFS rightly highlights, sky-high inflation rates and huge increases in the national living and minimum wages are putting unsustainable pressure on an already-fragile early years sector. Add to this the impact of rising energy costs and the ongoing severe staffing crisis, and it's difficult to see how the government can possibly justify its complete lack of action over our vital sector.

"We want all children to have access to a high-quality early education, and we want every parent who needs it to have access to affordable, accessible childcare – but unless the government starts investing what's needed, we will continue to see prices rise and places lost.

"Enough is enough. The government simply must commit to adequate long-term early years investment, and it must do so now. Simply ignoring this problem is not going to make it go away."