This summer, the sector has witnessed a sharp rise in nursery closures during the summer term setting course for an even more difficult winter

The NDNA has been tracking nursery closures since the 30 hours policy was introduced in 2017. During the summer term April to July 2022, 65% more nurseries have closed compared with the same months in 2021.

With the cost of living crunching at our economy, NDNA is warning the government, the new Prime Minister and new Ministers at the Department for Education that this academic year could see record-breaking numbers of closures leading to a catastrophic reduction in places.

Purnima Tanuku, chief executive of NDNA, said: “As we enter the new school year, our nurseries across the country are seriously worried about how they will make it through this winter.

“Most nurseries are small businesses and, similar to the picture in other sectors, these are hugely impacted by rocketing fuel costs, inflation and chronic underfunding. But nurseries have also had to pay unfair business rates which tax the space they give children to grow, explore and develop.

“We are expecting minimum wages to go up again as low paid workers grapple with inflation in double figures. Meanwhile qualified early years practitioners are leaving the sector to take up better paid work elsewhere, leaving nurseries struggling to recruit.

“All nurseries’ challenges can be sourced back to government policy, offering parents so-called ‘free’ childcare places, then paying only part of the cost of delivering them. If your biggest customer isn’t paying the going rate that makes it difficult to survive.

“Funding rates per child increased by less than 4% this year and yet inflation is running at more than 10% already. Every child in early years learns about quantity, number and understands ‘less’ and ‘more’. Ministers need to learn this lesson and recognise that inflation is currently more than double their last funding rate increase. This is unsustainable and could add up to disaster for children, families and the wider economy.”

More than a third of closures were in the 30% most deprived boroughs, with 15% of closures in the 10% most deprived wards. This compares to just 8% of closures in the 10% most affluent parts of the country.

Nursery closure data

• NDNA uncovered 124 nursery closures from member data and publicly available reports, checking these against Ofsted’s register, between April 2021 to March 2022
• These closures affect 4,999 children’s places based on registered capacity with Ofsted
• This is fewer than the previous “Covid year” of 232 closures (April 2020 to March 2021)
• Summer term 2022 has seen an increase of 65% in the rate of closures compared with the same period last year (April to July)
• Ofsted statistics back this up with a 76 net reduction in the number of nurseries from April to June 2022 – compared to a net gain for the same period in 2021
• Ofsted statistics from September 2021 to March 2022 showed a net reduction in nurseries of 196 – compared to a net gain of 20 providers in the first half of the year
• 34% of closures from April 2021 to March 2022 are in the top 30% areas of deprivation compared to 27% in the top 30% most affluent areas
• 15% of closures were in the top 10% most deprived wards.