The funding increase offered to nurseries in England to cover extra free childcare is less than the cost of a second class stamp, say campaigners.
From September three and four-year-olds will be eligible for 30 hours’ free nursery education if both parents work.
But the National Day Nurseries Association says the average extra 40p an hour offered to providers falls short of what they need.
The government says the amount it has allocated should be enough.
Currently, three and four-year-olds in England are eligible for 15 hours of free nursery education per week.
This entitlement will double from September under a flagship Conservative pledge in the 2015 election.
But nursery operators say the money allocated has never covered their costs and doubling the hours will make matters worse.
Until now, they have been able to offset the shortfall by charging more to families who pay for extra hours over the 15.
This source of income will dry up once families are eligible for 30 free hours each week.
Meanwhile, higher business rates and the planned rise in the national living wage to £9 in 2020 mean higher costs.
The NDNA sent a funding questionnaire to each of England’s 152 education authorities under Freedom of Information law, and received responses from 128.
On average, from September local authorities will increase funding for free nursery care for three and four-year-olds by 40p per hour to £4.37.
London boroughs will pay an average of £4.97 and councils outside London an average of £4.23.
And seven local authorities will pay below £4.00:
- East Riding of Yorkshire
- North Somerset
NDNA chief executive Purnima Tanuka wants the 30 hours plan delayed to allow a rethink on funding.
“Despite repeated government assurances that enough money would be made available for nurseries and talk of ‘record’ funding, the reality is that the average nursery will receive just a few pence more per hour, less than the price of a second class stamp,” she said.
“It’s totally inadequate. More funded hours will mean greater losses.
“The average nursery is short of delivery costs for the current 15 hours by almost £1,000 per child per year.”
Roy Perry, chairman of the Local Government Association’s children and young people board, said councils would be working closely with providers to deliver the extra free hours, as the scheme “represents a great opportunity to provide support for parents as well as early education for children to help them get ready to start school”.
“However, councils remain concerned that the proposed increase in funding will not be enough to secure enough high quality provision for everyone who wants it,” said Mr Perry.
The Department for Education says that by 2020 it will be spending a record £6bn on childcare, including an additional £1bn on the free hours.
A spokeswoman said the funding provided to councils should allow them to pass about £4.00 per hour to nurseries for each childcare place.
She argued that that this rate was “far higher than the average hourly cost of providing childcare” which recent independent research had put at only £3.72 per hour.