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Cash flow threat to private nurseries

Private daycare providers could face a cash-flow crisis and a threat to their viability under a new code of practice covering the provision of free nursery places to three-and four-year-olds that the Government is introducing from next week. Until now it has been customary for providers to receive money from parents to cover the cost of a place and then to reimburse them when the local authority funding came through. But, according to Clause 90 of the code produced by the Sure Start Unit, from 1 April, 'parents of eligible children should pay no charge in respect of their child's minimum free entitlement'.

Until now it has been customary for providers to receive money from parents to cover the cost of a place and then to reimburse them when the local authority funding came through. But, according to Clause 90 of the code produced by the Sure Start Unit, from 1 April, 'parents of eligible children should pay no charge in respect of their child's minimum free entitlement'.

Sylvia Archer, who runs a neighbourhood nursery at the Children's House in Stallingborough, Lincolnshire, said that while some local authorities were prompt and supplied funding at the start of each term, others might not provide it for several weeks, leaving the private provider to cover the costs in the interim.

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