Starting September 1, 2025, England’s parents of young children are being offered a lifeline that, on the surface, sounds almost too good to be true: 30 hours of free nursery care per week during term time for every child aged nine months to four years. The government touts this expansion as a historic investment in early years education, with the potential to save families up to £7,500 per child annually. But as the new school year dawns, nursery owners and early years experts are sounding alarms about the sustainability of the sector, warning that the very providers meant to deliver this promise are teetering on the brink.
According to BBC reporting, many nursery owners say the government’s payments simply aren’t enough to cover the real costs of running a childcare setting—especially for the youngest children, and particularly for those aged three and four who have already been eligible for some free hours since 2017. Helen Hazell, who runs Olive Tree Nursery in Bridgwater, Somerset, put it bluntly: the funding shortfall is so acute that providers are forced to "be creative just to keep the doors open." Hazell’s nursery is losing nearly £250,000 a year just on the three and four-year-old cohort. "There are going to be issues with families being able to find the childcare out there," she said. "For many [nurseries], they haven't got the means or the reserves to keep going and it's heartbreaking when, every time I look around, there are settings closing just purely because the funding isn't keeping pace with real-life costs."
The new scheme is, undeniably, a boon for parents. Mary, a mother from Wiltshire, told BBC that she is "very much excited" for the expanded childcare support. She’s increasing her daughter’s nursery attendance from two to three days a week. "Childcare has enabled me to return to work and increase my hours as a project manager, saving us around £300 a month in nursery fees and £30 a week in fuel costs for my elderly parents who used to help out," she said. "My daughter is thriving in her forest school nursery, and I've gained time to focus on work, errands, and myself."
But these personal success stories are set against a backdrop of mounting concern. The cost of a full-time nursery place for three and four-year-olds has increased by 10% in England, Scotland, and Wales, with the average annual fee now at £6,600. Many nurseries, facing rising wages, energy bills, and food prices, have had little choice but to increase the cost of unfunded hours to balance their books. This means that while some hours are free, the price of additional hours or services may rise sharply, potentially eroding some of the savings parents were hoping for.
Dr. Joanna Clifton-Sprigg, who researches childcare provision at the University of Bath, explained that the expanded entitlement is likely to stoke demand for places, driving up competition and, paradoxically, the cost of any hours not covered by the government. "The childcare rollout was likely to increase demand for places and drive up prices for unfunded hours because of increased competition," she noted in her remarks to BBC.
The pressures are not just financial. Staffing is a persistent problem, with many nurseries struggling to recruit and retain qualified staff. This is particularly acute in rural and lower-income areas, where margins are even tighter. Helen Hazell has had to make the painful decision to reduce her pre-school spaces for three and four-year-olds from 24 to 16 for the coming year. For families in these communities, fewer places mean longer waiting lists and, in some cases, the prospect of having no local option at all.
Clare Goby, owner of Sunbeams Playgroup in Clevedon, Somerset, echoed Hazell’s concerns. While she acknowledged that the extra funding is "helpful" for parents, she criticized government restrictions on so-called top-up payments—charges to parents for services outside the free entitlement—which she said are critical for nurseries to break even. "Generally, across the board, I think all of us are struggling to keep afloat," Goby told BBC. "The actual funding itself doesn't cover the costs that we have."
It’s not just a handful of nurseries feeling the pinch. Across England, settings are shutting their doors at an alarming rate, citing the widening gap between government funding and the true cost of care. The closures are not just numbers on a spreadsheet—they represent lost jobs, disrupted communities, and families scrambling for alternatives. The emotional toll is palpable. Hazell described it as "heartbreaking" to see so many colleagues forced to close, with children and parents left in the lurch.
In response, the government points to what it describes as a "record investment" in early years. By 2026, funding for the sector is set to rise to £9 billion annually, with an additional £37 million earmarked for 300 new school-based nurseries to increase the number of available places. Education Secretary Bridget Phillipson has positioned the policy as a cornerstone of the government’s broader economic strategy. "My vision for early years goes beyond this milestone," she declared. "I want access to high-quality early years for every single family that needs it, without strings and without unfair charges. Over the next few years, that is my commitment to parents."
Phillipson has also emphasized the broader benefits to the economy, arguing that affordable childcare enables more parents—particularly mothers—to return to work or increase their hours, fueling growth and productivity. "The policy is designed to give children 'the best start in life', and provide a 'huge boost' to the economy," she said.
Yet, despite these pledges and the positive impact for some families, the sector’s structural fragility remains unresolved. The government’s investment, while historic in scale, is being outpaced by inflation and rising operational costs. Many providers warn that unless the funding formula is urgently revisited, the expansion could backfire, leading to fewer places, higher costs for unfunded hours, and a sector unable to deliver on the promise of universal access.
As the new academic year begins, parents and providers alike are watching closely. For some, the expansion marks a transformative moment—an opportunity to work more, save money, and give their children a strong start. For others, it’s a time of anxiety, as the struggle to find and afford quality childcare continues. The coming months will test whether the government’s bold vision can be matched by practical delivery, or whether the cracks in the system will widen further.
For now, the promise of free childcare stands as both a beacon of hope and a source of uncertainty, with the future of England’s nurseries hanging in the balance.
