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For Alec, a civil servant from Sheffield, the expansion of government-funded childcare to children of many working parents in England from as early as nine months of age feels like a pretty monumental bit of help.
“I feel great about it,” he said of the scheme, which has been offering 30 hours of free childcare per week during term time to eligible children since 1 September. “This feels like the first government policy in my lifetime that has a genuine and immediate positive impact on my life.”
The previous government estimated the childcare expansion would cost £4.1bn a year by 2027/28, bringing annual spending to around £8bn on the childcare entitlements in total. The Institute for Fiscal Studies has suggested, however, that high take-up rates could make the annual bill £1bn higher than the initial estimates.
The impact of the expanded childcare offer has been immediate for Alec’s family: “The childcare fees for my child this month have been reduced by circa 55%, saving me a few hundred quid a month. It also says a lot about how unaffordable life is for most of the country when even those who are relatively well-off are genuinely relieved to have some extra money in the bank at the end of the month.”
Alec’s verdict is not shared by everyone. Early years providers across the country have been campaigning for years against the funded childcare scheme, complaining that the government underfunds the “free” hours so that settings are forced to incur losses on every free hour offered, increase their fees elsewhere or hire less experienced staff on lower pay.
This unresolved problem of funding shortfalls affects parents, their children and the sector in various ways. One unintended consequence of the scheme is that some settings simply refuse to offer parents the free childcare hours they are officially entitled to.
“The nursery my child attends is simply not offering the free hours,” said Jennifer, a publishing professional from Oxford. “They have a waiting list of over two years as they are popular but more importantly there is an acute shortage of providers. The funding does not cover the cost of the sessions, so the only way for them to cope would have been to put up base fees to cover the shortfall – they felt this was unfair for ineligible parents so have opted not to offer the scheme.”
“While we qualify for the 30 funded hours, our nursery can only accept 20 of them due to funding shortfalls that fail to cover their operating costs,” said Amy, from Kent.
“As a result, our monthly childcare expense for one child remains £1,668.92, a significant financial strain.
“The scheme is poorly thought out and barely scratches the surface. This is a systemic issue that desperately needs addressing.”
Alec, Jennifer and Amy were among a host of parents who shared how they had been affected by the expansion of the funded childcare scheme, and how they feel about it.
Amy was one of various parents who highlighted that while the government had decided to spend additional billions of pounds on expanding the funded childcare offer, parents’ nursery fees were often rising regardless as settings were trying to recoup rising operating costs.
“Following Rachel Reeves’s increase in employers’ national insurance, childcare providers nationwide have raised their fees,” she added. “A recent survey carried out by National Day Nurseries Association (NDNA) found that nurseries are increasing fees by an average of 10% to offset rising employment costs. In our case, our nursery applied an 8% fee increase in September 2025, a staggering leap for already stretched budgets.”
“Increased funded hours mean nursery prices in our town have all risen, to cover the [funding] shortfall,” said Roo, a civil servant in her 40s from Hampshire whose household does not qualify for the funded childcare scheme as her partner earns over the £100k income eligibility threshold per working parent.
“Our fees went up by 30% in April, an increase of £330 per month. It does feel like we are paying [extra] for something we are not eligible to access.” She pointed out that many higher earners who narrowly missed out on being eligible for the free childcare were cutting their hours or paying more income into pension schemes to become eligible.
“It’s people who are realising that they could work less, have more money in their bank account, and get more time with their children. This scheme is counterproductive in many ways, in a country that’s struggling economically with under-productivity.”
Roo was also among multiple parents who reported that the free childcare entitlement itself had not meant improved access to the hours families actually needed. Such responses seemed to suggest that the expanded scheme had created a higher demand for places that settings have been unable to accommodate everywhere.
“The increased demand at nurseries means that they are less flexible now,” Roo said. “We were not able to get a place at our first choice despite registering whilst pregnant, and there is little room for manoeuvre [in choosing specific days parents need childcare on each week].”
Sarah, a mother from Liverpool, shared a similar experience.
“I put my daughter’s name down for a nursery place two weeks after she was born, and the next available place was almost two years away,” she said.
“After phoning 15 nurseries I was only offered a Friday afternoon, which is the only time I don’t work. My husband has been forced to stop work so that I, as the main earner, can return to work until a place is available when my child is nearly two. This is our third child, we didn’t have this problem at all with the older two, we could choose a nursery that we liked and the days that we needed – a distant dream now!”
“I wish politicians would take a longer view and tackle this properly, rather than this sticking plaster which might make a good headline,” said Jennifer from Oxford. “On the ground it’s a different story.”
