Childcare sector facing mass closures

Nurseries, pre-schools and childminders could have to close their doors without urgent government help, according to a leading industry body.

The Early Years Alliance has today warned that childcare providers in England are currently facing significant losses as a result of a combination of government underfunding and reduced demand for places, as a result of the coronavirus pandemic.

New data from research analysts Ceeda shows that, as of 8 June, early years providers in England were operating at average occupancy levels of just 37%, compared to 77% in spring last year.

The industry body calculates that if the take-up of childcare places continued at this level on average over the next 12 months, providers would face average losses of £3.63 per funded two-year-old child per hour and £2.53 per funded three-and four-year-old child per hour.

The modelling also shows that even if more parents start taking up childcare places, providers will still face significant losses.

According to Ceeda, over the next 12 months, an average occupancy level of 45% would mean that a childcare provider would face average hourly losses of £3.06 per funded two-year-old and £1.96 per funded three- and four-year-old.

Previous surveys from the Early Years Alliance found that 69% of nurseries, pre-schools and childminders expect to operate at a loss over the next six months, while 25% said that it is ‘likely’ that they will be forced to close within the year.

‘As we have long warned would be the case, the joint pressures of inadequate government funding and reduced parental demand for places means that many nurseries, pre-schools and childminders are losing money on every childcare place they offer. This is simply not sustainable,’ said Early Years Alliance chief executive, Neil Leitch.

‘Even in areas where parental demand for childcare places remains high, providers are currently restricted on how many children they are able to care for under government guidance, which is going to place even more financial pressure on them over the coming months.

‘The fact is that the early years sector is at a crunch point, and unless urgent action is taken, we are going to see many, many more settings forced to close their doors over the coming months. This could mean chaos for parents – and particularly mothers – trying to access childcare in order to return to work at a time when the government is desperately trying to restart the economy.’

Photo Credit – LRCL (Pixabay)