Labour warns of “perfect storm” amid rising childcare costs and closures

July 30, 2020

Analysis of data from the Early Years Alliance has found that there are nearly 19,000 childcare providers in England that are at risk of closing in the next year and that 25% of childcare settings felt it was somewhat or very unlikely that they would be open in 12 months time.

This is sadly not new news. The sector has been significantly underfunded for decades and a continued lack of support during the Covid-19 pandemic will only make matters worse.

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said:
‘We know that many parents across the country have struggled with rising childcare costs over recent years, as early years providers have been forced to increase fees to try and plug the gap left by inadequate government funding.

‘Years of underinvestment into the sector had already left nurseries, pre-schools and childminders struggling to stay afloat, and so it’s no surprise that the additional impact of the coronavirus outbreak has meant that many are now reaching breaking point.

‘With a quarter of nurseries, pre-schools and childminders fearing permanent closure within the year, rising to as much as a third in some regions, it is simply unacceptable for the government to remain silent on this critical issue. The reality is that the support the government has provided to the early years sector so far is simply not enough to ensure that childcare providers are able to survive this crisis.

‘Failure to provide the funding the sector needs in the short- and long-term could mean the closure of thousands more providers, leaving parents without the childcare they need to return to work. If the government is serious about ensuring our economy is able to recover from the impact of the pandemic, it simply cannot let the childcare sector fall by the wayside.’

Purnima Tanuku OBE, chief executive of National Day Nurseries Association (NDNA) said: ‘For years, NDNA has been raising real concerns about sustainability in the early years sector, well before it was hit by the Covid pandemic.

‘We have research going back ten years showing that government funding rates for so-called ‘free’ childcare places doesn’t cover the cost of delivering high quality early education.

‘Since lockdown, nurseries have also had to absorb additional operating costs such as installing more handwashing stations and extra cleaning. But as costs have increased, their income has dropped due to low numbers of children.

‘The Government has given most local authorities an extra 8p this year per hour per child, but this won’t even cover inflation, let alone take account of above-inflation national minimum and living wage rises.

‘NDNA’s own research shows that 71% of nurseries expect to operate at a loss over the coming months. That situation is clearly not sustainable, putting childcare places at risk and threatening childcare businesses.

‘If this Government is committed to a plan for jobs and ‘levelling up’ for all our children, especially the most disadvantaged children, it must invest sufficiently in their early years education.’

Kate Green MP, Labour’s Shadow Education Secretary, said:

‘The Conservatives have created a perfect storm for working parents across the country, with a crisis in the childcare sector locking children out of early education and making it impossible for many parents to return to work.

‘Ordering parents back to work without allowing them to access the childcare they need is a stark reminder that Boris Johnson is completely out of touch with the needs of working families.

‘The Government must urgently provide targeted support to the childcare sector, and ensure that parents can access the childcare that they need.’