More money should be paid to childcare providers involved in the free 30 hours per week scheme for three and four-year-olds, according to the Commons Treasury Committee.

The committee also found that inadequate resources have led to providers increasing charges for children who are not eligible for the scheme, such as under-threes.

"It paints a fairly stark picture and sends a massive warning to the Government that they need to sort this out," said Neil Leitch, chief executive of the Pre-School Learning Alliance.

"If a committee that knows about money is telling you that there isn't enough money in the system, then they need to look at levels of funding. Politicians, parents and providers are all in agreement."

The committee also found that funding figures put out by the Government regarding the policy are "misleading and out of date".


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"One estimate is of a shortfall of £157m a year," said Rushanara Ali MP, who sits on the committee.

"We want the Government to make it affordable, to provide the nursery places that it wants to see provided. The system works for some people, but not for enough people.

"I think the policy is well-intentioned but as with some policies, you can get unintended consequences."

Parents are also being asked to pay for things that were previously free, such as food and activities, and cutbacks have been made in higher qualified staff, the study found.

"What I have chosen to do is just to charge a very small amount and say to parents 'this is voluntary and I hope you will support us' and they have all chosen to do that," said Janet Blann, who manages the Northfield Quaker Pre-School in Birmingham.

"It's affordable to all parents but it can make a difference of around £1,000 a term to us and that's worth having."

Childcare pledge at breaking point

The report said the Government had put out "misleading" and "out of date" figures regarding how much it provides in funding per hour because it included money intended for other schemes, or failed to take into account things like the introduction of the National Living Wage.

The study said: "The most recent estimate of the average cost per hour of providing childcare is £4.68. The average rate that the Government actually passed on to providers for 2017-18 was £4.34, meaning some providers will receive less funding than the costs they incur."

The MPs urged the Government to keep the childcare voucher scheme open until winners and losers of discontinuing it are known.