Nurseries are set to pass on higher costs to parents or even close because of a substantial real-terms funding cut, early years providers have warned.
Government spending on free childcare for young children in England is set to fall by 8% in real terms over the next two years, according to the Institute for Fiscal Studies (IFS).
The Early Years Alliance says 4,000 settings have closed in the past year.
The government says it is putting an extra £160m into early years this year.
But new analysis from the IFS says funding is not keeping up with rising energy bills and other costs.
Geoff Parkes, whose family run two nurseries in West Yorkshire, has already had to pass on rising costs to parents, and is going to have put up prices again.
“We’re looking at the cost of the business absolutely ruthlessly, in terms of how can we save more energy?” he told the BBC.
Some parents have had to stop sending their children, he said, while others have been cutting down on the number of hours…