The Government expects childcare providers to start increasing free nursery education to 15 hours a week over 38 weeks a year from next month and to allow parents to access it flexibly over a minimum of three days a week.
This represents a challenge and a threat to the sustainability of some providers, who are still smarting from the DfES's new code of practice which prevents them charging parents 'top-up' fees to supplement the meagre nursery education funding (NEF) rations, the way many have been able to stay afloat.
Some of the most pressing issues for providers and local authorities charged with implementing the new arrangements have been tackled in the Childcare Implementation Project (CIP). Rochdale Council in Lancashire is leading the advanced guard of councils rolling out the extended entitlement from April (see box).
While it is planning to press ahead, other councils such as Camden in London are being more circumspect and are more likely to introduce the flexible entitlement nearer to the Government's 2010 deadline.
North and south
There appears to be a north-south divide in attitudes towards Government policy on free nursery education. In the south, particularly in Kent, PVI providers have been up in arms over the ban on top-ups, warning that there will be mass closures of nurseries.
In the north of England the concern is that a gap is developing between what the Government provides in NEF and the actual cost to settings, but feelings on the issue are far more restrained than further south.
Darrell King, chair of the Kent PVI providers association which has been leading resistance to Government policy, says that settings face further punishment, with the introduction of 15 hours delivered flexibly, as this will entail more administration costs.
'If people are losing money on the 12.5 hours a week, then simple maths shows they will lose even more when hours are extended. We are subsidising more expensive childcare places in children's centre provision,' she adds.
Lynn Hoare has been running nurseries in Brighton for more than 20 years and warns, 'The amount the Government gives us in grant doesn't pay for what we are expected to do and raising it to three-hour sessions is not going to do anybody any favours.'
She says she has to charge parents for 'extras' to make up the losses she is currently incurring under the 12.5 hours a week arrangements, and adds, 'If I didn't we would go under.'
Mixed mood
West Berkshire Council has been piloting a parents' agreement for the flexible offer as one of the pathfinder authorities taking part in the CIP and has just completed an audit of providers.
Maria Shepherd, early years and childcare officer at the council, says it is clear from the audit that some nurseries are using the NEF as a subsidy.
'They are taking the amount of the grant off the fees, so they are not actually offering a true, free place,' she adds.
She says the council is considering various options aimed at ensuring that providers meet the requirement to provide free nursery education, including persuading them to charge an hourly rather than sessional rate and possibly charging the same fee for delivering the Foundation Stage as they do for caring for babies.
'There is a mixed mood among our providers, but some are quite optimistic as we are working with them. We are not trying to put anyone out of business because we have a duty to ensure sufficient provision. But there are some who are very worried and say that if they don't get enough money to cover their costs they will have no alternative but to pull out,' she adds.
Perhaps reflecting that north-south divide, Barbara Mands, a senior support officer in York City Council's early years, is more upbeat and believes most of its nurseries will be able to accommodate the changes. She acknowledges that some providers may have staffing and accommodation problems to resolve. But she says, 'We have identified which providers need support and are helping them with our development work team.'
She adds, 'We did have a small number of providers who were charging top-up fees, but we seem to have rectified this. We believe providers can still be viable without the top-up fees, which go directly against Government guidance.'
20 hours
While the move to 15 hours seems manageable, she anticipates more problems, particularly for schools, when free entitlement is extended to 20 hours a week - this, however, is a long-term goal and the Government has yet to set a timetable for achieving it.
She explains, 'When we go to 20 hours, that's an additional two sessions on top and that will have implications for the way schools plan their curriculum.'
York childminders registered to provide free nursery education are being encouraged to help deliver the entitlement flexibly. However, Barbara Mands believes they may be more involved in York's pathfinder pilot for two-year-olds' nursery education, which is now linked to the pilot for three- and four-year-olds, as it may suit parents of younger children to use a childminder rather than group provision.
Ms Mands says York City Council is taking 'a fairly big-bang approach', with 'only a handful of nurseries not ready to deliver the flexible offer from day one'. Schools with nursery classes will take longer to get involved because of the way they are funded through formulas.
She adds, 'There is still an issue with sustainability because if you take inflation into account, there has been a slight loss to providers. But we have a business support team who can give one-to-one help for providers who need it.'
The DfES emphasises that the extension of the flexible offer is directly linked with the roll-out of extended schools - an area being explored by Blackburn and Darwen Council in one of the pathfinder pilots.
The DfES says, 'Some local authorities have brought together their teams from early years and childcare with extended schools, others are working in partnership. It will be crucial to link these two strands of work together.'
CASE STUDY
Willows Private Day Nursery, Rochdale
The task of introducing the 15-hour entitlement to free nursery education seems to hold few terrors for Tamsin Nichols, who co-owns and manages the Willows Private Day Nursery in Rochdale, the Lancashire local authority spearheading its introduction.
'We don't see that it will make a great deal of difference. Some nurseries are very concerned about it, but we started a while ago trying to get our heads round it and a lot of parents say they want to stick to the same sessions,' she says.
Tamsin, who runs the 33-place nursery with colleague Stacey McKler, says that only one child comes just for the nursery education and the others come for a full day or for a morning or afternoon.
Rochdale has opted to introduce the 15-hour flexible offer across the borough from April, with 75 per cent of parents to be targeted in the first phase. By September 85 per cent of parents will be included and the remaining 15 per cent by April 2008.
However, funding remains a critical issue. A report on the progress of the Rochdale pilot for the Childcare Implementation Project warns: 'Without an increase in the PVI rate, approximately 45 per cent of providers in this sector would be making a substantial loss and might be reluctant to participate... affecting our ability to deliver the free entitlement fully.'
A proposal to increase the hourly rate given to PVI providers for nursery education from 3.14 to 3.40 has been submitted to the schools forum which distributes the funding.
Tamsin Nichols says her nursery is 'losing out slightly' through the NEF.
It receives 7.85 per two-and-a-half-hour session, which equates to an hourly rate of 3.14, while her normal hourly rate is 3.57.
'We would like Government to bridge that gap,' she says.