Earlier this year, the Cairneagle published a survey for nursery providers in order to better understand the current challenges.

The consultancy firm sends out surveys periodically to gain new insights as the market reacts to domestic and international movements.

Currently, the cost-of-living and recruitment crisis are driving more nurseries into significant financial difficulty.

Cairneagle childcare provider survey: Key findings

The survey is a regular one conducted by Cairneagle and is targeted towards group operators.

Some of the findings included:

1. Occupancy has crept up below the same point last year but is still more than 2 percentage points below pre-Covid-19 levels
2. The major contributing factor to reduced occupancy is recruitment and retention of staff – 60% of respondents reported that the situation had worsened since February 2022 (and recruitment was already a major issue before Covid-19)
3. Reduced demand from parents as a result of economic uncertainty and the cost-of-living crisis is also a major theme impacting occupancy. As such, “solving” the staffing crisis wouldn’t currently result in full occupancy recovery to pre-pandemic levels
4. Given the current inflationary environment, operators are having to pursue aggressive fee increases, at an average of 7.5% and with a quarter over 9.5%. Despite this, the majority are experiencing margin erosion, with almost a quarter stating that their margins have reduced by more than 10%. Insufficient rates for funded hours are clearly a major contributing factor
5. While some operators have put acquisitions on hold until the market stabilises, others are continuing with 33% stating that they will continue to acquire new settings.