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by Jess Gibson and Shannon Pite

The majority of early years providers in England expect to struggle to meet the demand of the upcoming extended entitlement offers, research by the Early Years Alliance has found. 

According to a survey of 1,196 early years providers in England, carried out in January and February, 68% of nursery and pre-school respondents reported that they are  already at full capacity, while just 3% said they have a large number of spaces available. 

Of the respondents planning to offer funded two-year-old places, 86% predict an increase in demand 鈥� however, of these, 71% are not planning to increase the number of two-year-old places they offer. 

Similarly, of those settings planning to offer places for under-twos when the scheme expands from September 2024, 84% are expecting an increase in demand, with around half (53%) expecting a significant increase. However, of these, three-quarters (76%) are not planning to increase places.  

19% of all respondents say it is likely or very likely that their setting will opt out of at least some of early entitlement offers entirely by September 2025鈥� 

The research also highlighted the financial challenges facing providers, with 86% of nurseries and pre-schools warning that the upcoming increase in the national living wage鈥痺ill have a negative impact on their finances. Of those, 81% plan to increase fees to mitigate the impact of these cost pressures, while 52% intend to introduce or increase optional charges. 

Overall, 24% believe that it is likely or very like that their setting close over the next 12 months. 

The findings come as a new survey from Pregnant Then Screwed reveals that a third of parents eligible for new early years funding are considering leaving their job or working reduced hours due to rising costs.鈥� 

Commenting Neil Leitch, CEO of the Early Years Alliance, said: 鈥淭hese survey findings should send alarm bells ringing throughout government. With just weeks to go until the rollout of the extended offer, it is clear that despite the government鈥檚 continued promises, not all eligible families will be able to access the early years places they need.   

鈥淵ears of sustained underfunding combined with a worsening staffing crisis and limitations on space means that many providers simply won鈥檛 be able to increase places to meet the surge in demand for the new offers, while others will have no choice but to limit the number of places they deliver under the expansion or opt out of the entitlements completely.   

鈥淎nd, of course, with so many settings still struggling with the impact of inadequate funding rates in the face of sharp cost rises, even those parents who are able to secure a funded space are still likely to face sharp increases in fees and charges for anything outside of their entitlement hours.   

鈥淲e have long warned that no expansion of the early entitlement offers would be workable in practice unless pre-existing challenges were properly addressed. And while we recognise that ministers have taken some steps to try and address the sector鈥檚 concerns 鈥� including the recent recruitment campaign 鈥� there is still so much more to do to address the wider systemic issues with the current system.  

鈥淚f the extended entitlement policy is going to have any chance of success, the government needs to urgently address the financial and capacity challenges facing providers. This means increased investment and the development of a clear strategy for supporting not just recruitment, but also the retention of the existing early years workforce. Simply put, this is the only way to ensure that providers will be in a position to deliver the affordable, accessible, sustainable quality early education places that families need. 

鈥淪o, as we approach the 2024 Budget, it is absolutely vital that the government acknowledges and recognises the scale of the crisis we are in and takes definitive action to turn things around. Continuing to deny there is a problem is simply not an option.鈥�