Figures given exclusively to ITV News show that last year, £38 million of the early years childcare funding given to local authorities did not reach providers, Chris Choi reports
The sector says years of underfunding have left it short-staffed and that many providers have already shut their doors.
New research seen by ITV News reveals that in many areas, daycare centres for children are already struggling to cope and around three-quarters already have waiting lists.
In its March Budget statement, the government launched plans for a big extension to free nursery places.
Today it predicted that the scheme will enable 60,000 parents to return to work, but there are new warnings for parents hoping to benefit from the changes.
Purnima Tanuku, Chief Executive of National Day Nurseries Association told ITV News: "In some local authority areas they already have sufficiency issues, they have not got enough childcare in those areas so that means parents will be struggling - they will not be able to get back to work and they won't be able to find adequate childcare."
The government's new free childcare plans in England are based on a 38-week school year, from next April working parents of two-year-olds get 15 hours free childcare a week.
Starting next September, children over nine months and under two years are also included.
A year later, in September 2025, those free nursery places expand to 30 hours a week.
Currently in England, only children aged three and four are eligible for free nursery places. It's not only nursery owners that have urgent questions about the plan - so do many parents.
ITV News filmed with 15-month-old Ivy Marsh - who will be one of the first toddlers to benefit from the new plans when she reaches the age of two.
Her mother, Linda Marsh, told us: "It will make a difference but because we don't know what it would equate to, whether we still have to pay for meals, whether we still have to pay for additional hours.
"When they announced it we thought 'great, that's really going to help us'. But then because we have not been told anything else we are still a bit like, well, we will just keep going as we are - because we don't now how else it's going to work."
Research from more than 300 nurseries seen by ITV News shows 74.9% already have a waiting list for one and two-year-olds - and the majority (67%) would need to expand their premises to take on more.
The childcare announcement by the Chancellor Jeremy Hunt led to such a clamour for information from parents that at some nurseries, they've already taken enquiries about children not yet born.
Sarah Carr, a nursery owner in Preston, told ITV News she got calls from pregnant mums asking how the scheme would work: "Well, still to this day we have no idea what that means, how that translates for families and what the funding will be." The government told us it now plans to review childcare across every local authority area in England to identify any future supply problems.
But as the country moves towards a new childcare system, we’ve found that those who will guide the scheme through its early steps already have worrying doubts about its future. A Department for Education spokesperson told ITV News: “The government is making the single biggest ever investment in childcare in our country’s history. We are determined to support as many families as possible with access to high-quality, affordable childcare.
“Whilst we are providing higher rates to providers from September, we are clear that any underspend from a local authority’s early years budget must be carried forward to the next financial year, and remain within the education budget.”
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