PRIVATE nurseries have hit out after learning a council run nursery is operating at a "huge loss" — while they are being paid "too little" by the local authority to provide free places for children

A Freedom of Information request revealed that Harvey Children's Centre nursery was operating at a loss of £55,000.

The Federation of Small Businesses (FSB) said while the council subsides its nursery it was putting at risk the viability of private nurseries by paying too little for the 30 hours of state-funded 'free' childcare parents are offered. Bolton is paying nurseries around £4 an hour per child although nurseries say it costs more than £5 an hour to deliver the care.

A spokesperson for the Bolton Alliance, made up of nursery owners, said: "What the council is doing is not only grossly unfair but it is anti-business and anti-competition. If any of us made a loss of £55,000 we’d have to close down.

“The council needs to pay nursery providers a fair amount and stop running its own state-funded services that are harmful to rival private sector businesses and uses tax payers’ cash to subsidise something they can’t run profitably. And if they can’t do that, how do they expect us to?”

Robert Downes, from the FSB, said: "The government’s 30 hours of free childcare initiative has put massive pressure on nurseries, who are effectively being told to offer a service at a financial loss to themselves. So, for Bolton Council to run a state funded service, which even they can’t run at a profit, I find totally unacceptable.”

Council leader Cllr Linda Thomas responded: "I understand day care nursery owners’ concerns over the funding of 30 hours Free Childcare initiated by the Government because the government has allocated to councils a totally inadequate amount to pass to nurseries to pay for it.

"Our intervention to tackle this disparity In Bolton was for us to give two per cent above the amount we were directed by government to pay the nurseries in order to help them alleviate the financial difficulties many faced by the cut.

"The government have been disingenuous calling this 'free' as we know many families have had to pay top ups."

Harvey Nursery was in danger of closing but the proposals were withdrawn following a public campaign.

Cllr Thomas said Harvey Nursery was in one of Bolton's most deprived wards where families were desperate for the support to continue.

She said: "The extra help to keep this open did not come out of the allocation for 30 Hours Free Childcare pot, but from other savings made elsewhere in other departments."

She said work was underway to draw up a revised business plan for Harvey Nursery.

Cllr Thomas added: "The issue of government underfunding nurseries for 30 hours Free Childcare is a national disgrace."