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New funding formula could lead to loss of early years services in London

Nurseries in London could be forced to close under proposals to introduce a universal basic funding rate for early years services, London Councils has warned.

The government has brought in the proposals at the same time as promising 30 hours of free childcare for working parents, due to start in April 2017.

However, London Councils warned that childcare providers in the capital would not be able to cope with the increased demand because different childcare providers in London have different running costs, and those with higher costs would lose out under the proposals.

Cllr Peter John OBE, London Councils’ executive member for children, skills and employment, said: “More than 140,000 children across the capital benefit from free childcare provided by maintained nurseries. These places help support some of the most deprived children in London, particularly where there is a lack of alternative childcare options.

“Setting a universal base rate of funding for all childcare providers will result in many nurseries losing out if they have higher running costs.

“Quality early years education enables children growing up in deprived areas to catch up with their more affluent peers by the time they start primary school. It would be huge concern if the new early years funding formula resulted in nurseries reviewing or cutting back the service they provide to families that need it most.”

London Councils called on the government to protect early years funding for boroughs which are set to lose out under the current proposals.

In addition, it said that the government should give boroughs the power to respond to local market conditions and transfer funding between different funding pots without caps being imposed.

The government has guaranteed supplementary funding of £55m a year to local authorities for maintained nursery schools for the next two years, but has not promised any funding beyond that.

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