One in ten nurseries and other early years childcare providers in Doncaster have closed since 2015, according to data published by Ofsted.
The figures show that there were 375 early years education providers in the borough on Ofstead’s register at the end of March 2018, 41 fewer than in March 2015.
Any provider who cares for early years children, from birth up until the August following their fifth birthday, must be registered with Ofsted.
All three and four-year-olds in England are entitled to 15 hours of free childcare per week during term time.
Since September 2017, parents have been able to claim an additional 15 hours if both they and their partner earn less than £100,000 a year but more than the equivalent of 16 hours at the minimum wage.
The Pre-school Learning Alliance, an early-years education charity, claim that the funding the Government provides for the scheme is not enough to cover the costs incurred by providers - and that has led to providers having no choice but to close.
Neil Leitch, chief executive of the Pre-School Learning Alliance, said: “There has never been any such thing as free childcare. It’s subsidised childcare.
"Early Years funding is frozen until 2020, and while our costs go up, we’re just told to make it work."
The organisation has found that more than four in ten providers are now charging parents for extras such as lunches or nappies to make up the shortfall in funding.
Mr Leitch added that looking after children was a ‘difficult’ job.
He said: “Why would anyone do it if you're earning peanuts? You could work half the hours in Tesco and be better off financially."
Nadhim Zahawi, Minister for Children and Families, said it was ‘normal in a private market’ for providers to join and leave the Ofsted register.
He said: “We want every child to have the best start in life, and it is great that more than 340,000 children nationally have benefited from a 30 hours place in its first year."