A POPULAR nursery in Stroud has been forced to close after a change in government funding rules devastated the business.

The Shambles Nursery School in Lansdown, which has been going for almost 50 years, had been struggling financially since a government funding change six years ago hit takings.

Now owner Jane Arnold has taken the difficult decision to shut the nursery on July 22, leaving the parents of the 43 children who attend hugely disappointed.

“I am absolutely gutted – I started when I was 20, the nursery is part of my life,” Jane said. “It’s been running for 47 years and to see it finished is going to be so sad. We would have carried on if the funding was adequate but in a business if you can’t cover the costs you have to shut down.”

The Shambles has five staff, two who have worked there for 16 years and another who has been employed for 10 years.

So why has The Shambles been struggling?

Children aged three and four in the UK are all eligible for 15 hours-per-week free childcare during term time, which is 38 weeks of the year.

The Dedicated Schools Grant is a ring-fenced government grant for education. How this funding is allocated is decided by Gloucestershire County Council, which pays £3.50 per hour through The Nursery Education Funding (NEF) for each child for up to 15 hours-a-week.

Jane said: “If a child attends a three-hour session the nursery receives £10.50 from the NEF, but our fees are £14.50 so there is a shortfall of £4.

“If a child stays a full seven-hour day, 9am to 4pm, The Shambles receives £24.50 from the NEF but our fees are £32.50, resulting in a shortfall of £8 per child per day. If a child attends just 15 hours per week we cannot charge the difference between our fees and the funding from the NEF, it has to be delivered free.

“Of course parents who send their children to the nursery for more than 15 hours pay the extra.

“The NEF has only increased from £3.22 per hour to £3.50 an hour in the last six years. How can you possibly keep pacewith ever increasing costs, when you are not permitted to charge the going rate?”

Asked why parents do not all voluntarily pay the £4 or £8 difference, Jane said: “That is the $50m question.

“Until they introduced free NEF about six years ago parents had to pay the difference which was called a top up. But now we are not allowed to charge a top up – 15 hours has to be delivered free.

“I feel regretful about letting the parents down and I want to add that some parents have paid us a voluntary contribution towards fees over the years and for that we are extremely grateful.

“Those parents helped to keep us financially viable up until now.”

Although she still owns the nursery, Jane is retired and her daughter Katie now runs the business. They broke the news of the closure to parents on Friday.

Samantha Atkins, 34, whose two-year-old son Reuben has been going to the nursery for over a year, said: “People don’t want it to shut, everyone’s really sad. The staff are really lovely. Reuben’s so happy and settled there.”