Philip Ford, managing director of Hopscotch Nurseries, explains why independent nurseries face an impossible choice

The early years sector is facing a looming crisis. Independent nurseries like ours are being pushed into a seemingly impossible position, forced to deliver ‘free’ childcare on funding that doesn’t come close to covering costs, all while navigating a policy landscape that is economically unworkable and operationally chaotic. 

With rising wages, employer National Insurance contributions (NICs) and soaring overheads, the numbers simply don’t add up. The harsh reality is that without urgent intervention, many of us will not survive. 

Nurseries have been plugging the funding gap for years, but we are now at breaking point. The 2025 increase in the National Minimum Wage, on top of recent rises in employer NICs, will make staffing (which is our single biggest cost) even more unaffordable. 

For larger corporate chains or those with private equity backing, it will be a challenge – but for independent nurseries, it’s nothing short of an existential threat. We don’t have the financial cushion of big investors, and staff numbers can’t be reduced due to legal child-to-staff ratios. And we can’t keep offsetting shortfalls by raiding the goodwill of our parents and asking our private-paying parents to keep paying more – because they, too, are feeling the squeeze. 

In addition, new restrictions on consumables charges will create an operational nightmare. We now face the unthinkable – treating children differently based on whether their parents can afford extras like food, trips and resources. As a family-run nursery group that has proudly served the Brighton and Hove community for nearly 40 years, Hopscotch has always strived for inclusivity – but this policy will force nurseries to create a two-tier system where some children receive meals, trips or resources while others do not. This goes against everything we stand for in early years education. 

This is not just morally troubling – it’s practically unworkable. How do we manage different meals for different children, with already stretched staff, while safely managing allergies and mealtimes? How do we plan trips out of the nurseries when half the group can participate and half cannot? And how do we explain this to parents who assumed ‘free’ childcare meant just that? Our choice is either potential non-compliance and loss of funding, or compliance and risk drawing scrutiny from Ofsted and local authorities, even though this government policy has created the problem. 

For nurseries like ours, this is now a fight for survival. Unlike corporate chains, we don’t have the luxury of absorbing losses indefinitely. We are already seeing fewer funded places, because we simply cannot afford to offer them, and cuts to staff development at a time when recruitment and retention are already at crisis point. What’s more, rising fees for private places are making childcare less accessible for working families. 

This isn’t just about funding shortfalls anymore. This is about whether independent nurseries can even exist in five years’ time. We need policymakers to understand the complexities of what we are talking about here, our ask is that they: 

1. Fix the funding rate – We need a per-hour rate that reflects actual costs, not an arbitrary figure that forces nurseries to subsidise places at a loss. 

2. Reverse the consumables restrictions – Or provide additional funding to cover these costs. The current system is unworkable. 

3. Recognise that independent nurseries are irreplaceable – If we disappear, we will not return. That means fewer childcare choices, higher prices and an early years sector controlled by financial institutions, not passionate childcare professionals. 

4. Tackle the staffing crisis head-on – Instead of pushing up costs through NICs rises, introduce targeted incentives to retain skilled practitioners. 

The government’s expanded childcare pledge is built on a foundation that is already collapsing. Without urgent reform, we are heading towards a homogenised sector dominated by a handful of large chains with profit, not children, as their main motivator. Independent nurseries will be marginalised further and probably squeezed out entirely. We owe it to our children to ensure this doesn’t happen.