Local private childcare providers are facing major challenges in the midst of a cost crunch, with government payments for ‘funded’ places not covering the full costs of provision.
Nursery owners and operators described the various difficulties facing the sector when they met Nick Timothy, the MP for West Suffolk, at a recent roundtable discussion held at Haverhill’s EpiCentre on Friday 28 March 2025.
Mr Timothy has also visited and chatted to staff at a number of nurseries across West Suffolk in recent weeks and months, including at Castle Fields Pre-School (see picture below) and Colourbox Montessori in Haverhill and New Horizons Day Care in Mildenhall.
The nurseries are also experiencing pressure because they face unreasonable and constantly changing regulations, as well as the Government’s Jobs Tax — the rise in National Insurance Contributions (NIC) – which took effect on Sunday 6 April 2025.
One business operator said the NICs rise means extra costs for them of £250,000, and asked: “How are we as a small business expected to survive if people are told they can expect a free service but at the same time our costs, including business rates, energy bills and the demands of administration, have gone up?”
The following sentiment was also expressed during the discussion: “We are trying to keep our heads above water. Yet the sector has been under-funded for 25 years. This funding doesn’t cover all of the things we need to do. We are expected to provide everything that a state-funded nursery provides but for a lower cost.”
The situation — in which the Government has taken on a larger role in ‘funding’ spaces for children in private providers — means that nurseries are faced with guidance that make often makes seemingly arbitrary changes in whether they can charge for services such as providing lunch for the children or covering registration fees.
Commenting after the meeting, Mr Timothy said: “Across West Suffolk, the early years sector provides an essential service in the initial education, nurturing and development of young children. I was grateful for the opportunity to listen to the providers, and discuss the serious challenges facing nurseries during the recent roundtable.
He added: “In addition to the burden of regulation providers face, the sector is on the brink of crisis because the Government subsidises a portion of places while failing to cover the full costs. They are also being hit hard by business rates and the rise in employer National Insurance contributions, which has just come into effect. As in so many other sectors that provide crucial front-line services, this Jobs Tax will cause cuts in investment and staff recruitment for these nurseries. I will challenge ministers on these issues in Parliament.”
