(Bloomberg) -- Almost a quarter of England’s nurseries, pre-schools and childminders say they are likely to shut down in the next 12 months, threatening to undermine the government’s plans to get more women into work.

That’s according to a survey of 1,196 such service providers conducted by the Early Years Alliance between Jan. 25 and Feb. 8. Child care operators are struggling to meet increasing expenses, particularly with wages set to climb in April, and have complained that funding from the government doesn’t cover their costs.

The survey also reveals that the majority of child care settings won’t increase the number of available places when the government’s plan to expand free child care to some two-year-olds kicks in from April. Given the number of providers who already operate at full capacity, this means the policy will largely benefit parents with children already in a nursery or pre-school, rather than meet government aims to boost labor participation among women.

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“With just weeks to go until the rollout of the extended offer, it is clear that despite the government’s continued promises, not all eligible families will be able to access the early years places they need,” said Neil Leitch, chief executive officer at the Early Years Alliance. “Years of sustained underfunding combined with a worsening staffing crisis and limitations on space means that many providers simply won’t be able to increase places to meet the surge in demand for the new offers.”

The ruling Conservative party announced measures in last year’s Spring Budget to offer working parents more government support in a bid to reduce the cost of child care. Full-time nursery fees in inner London for children under two costs more than £25,300 for 52 weeks, 38% higher than the average across the country, according to data from children’s charity Coram.

But the survey from the Early Years Alliance suggests the policy may not tackle the UK’s labor inactivity problem. While the childcare measures were specifically aimed at increasing places at nurseries, 70% of settings that will offer the expanded discount don’t plan to take in more two-year-olds.

Providers are blaming cost pressures — and a lack of help from officials. Over half of settings that offer places to two-year-olds and plan to continue to do so under the scheme haven’t received confirmation of their funding rates, making it hard to prepare for the April rollout.

At the same time, almost 90% of nurseries and pre-schools said the increase in the National Living Wage will hit their finances. That will be unwelcome for parents too as more than 80% of operators said they plan to push up fees in response.

A separate survey from Pregnant Then Screwed, an organization that supports parents, showed that a third of parents who qualify for early years funding are considering quitting their jobs or working fewer hours to cope with higher childcare costs.

Research by the New Economic Foundation last year also said the policy would disproportionately benefit the wealthiest in the country while the poorest will have limited access to high-quality child care education.

“As we approach the 2024 Budget, it is absolutely vital that the government acknowledges and recognises the scale of the crisis we are in and takes definitive action to turn things around,” said Leitch.

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