Councils are currently receiving a flat rate for 2013-2014 based on local labour costs, which provides an average of £5.09 for each 15-hour, two-year-old place.
After 2015, local authorities will be funded on a 'use it or lose it' basis, with money being withdrawn where children are not taking up places.
At First Class Child Care in the north of England, managing director Andrew Clifford is concerned that funding allocations could reduce in 12 months' time.
He said, 'In West Yorkshire, nurseries and childminders are receiving around £4.86 for each place, but it was suggested to me by one of my local authorities that this could reduce to £3.86 in a year's time. This would bring it down to the level we receive for the three-year-old offer and would not be realistic for two-year-olds.'
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