Childcare costs set to rocket after nurseries hit by rates rises of 300%

Privately run nurseries, on which the majority of Scottish parents depend for childcare, have seen rates rise by as much as 300 per cent after the recent revaluation of property.

The National Day Nurseries Association (NDNA) Scotland says the situation is worse north of the Border because there is no transitional period as in England.

This means rises applied immediately from last month, landing private nurseries with extra costs of thousands of pounds, unlike in England where any significant rise can be spread across the year. Nursery owners say charges to parents will have to rise to avoid closure.

Purnima Tanuku, chief executive of NDNA Scotland, described the rises as "significant" and warned it was a huge issue for nurseries and parents.

She said: "Following a change in the way these are calculated, we have been hearing from members whose rates have risen by thousands and thousands of pounds.

"Some are seeing 300 per cent increases, which is a massive cost pressure for nurseries as many are small businesses.

"The problem has been compounded by the fact that, in Scotland, there is no transitional period, so any rise has applied from this April."

She warned there had been no time for nurseries to plan and adjust to the rises.

Ms Tanuku added: "This potentially also has a huge impact upon parents, as if they are to remain open, nurseries will have little choice but to review fees."

Daily rates for nursery care vary in the private sector but are around 40-60, and many charge a joining fee, for example 75.

Business rates are re-evaluated every five years and, north of the Border, the Scottish Government is responsible.

Nursery owners from Fife are expected to protest about the rates rises outside the Scottish Parliament on Thursday.

They hope Fife Labour MSP Marilyn Livingstone will raise the issue at First Minister's question next week.

A Scottish Government spokesman claimed that the average business would save 1,300 under the revaluation and a transition scheme would cost the public purse 77m next year.

He said: "In England, the transitional relief scheme has reduced the average saving to only 770 – almost half the 1,300 saving in Scotland.

"In Scotland, a traditional transitional relief scheme would have resulted in an estimated transfer of funds from a large part of the private sector, amounting to almost 77m in 2010-11 alone.

"In the current economic climate, such outcomes would have been impossible to justify."

"Our clear focus is on delivering economic recovery and ensuring Scotland's return to economic growth is sustained."