The latest figures from Ofsted highlight the significantly drop in number of active providers registered

This figure has been falling steadily over the past 8 years however with the cost-of-living crisis and recruitment rates falling, the early years sector is facing a cliff edge.

On 31 March 2023, there were 1.27 million childcare places offered by providers registered, down by 24,500 (2%) since last year.

While the number of providers has fallen by 7% since March 2022, the number of places has only dropped by 2%. However, Ofsted highlight that this is mainly driven by an increase in the number of places offered by providers of childcare on non-domestic premises.

Policy leaders respond

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said: 

“Today’s Ofsted figures are a clear example of exactly what we have been warning about. Years of underfunding and completely disregarding the sector time have left us with a shell of an early years sector with provider numbers plummeting at an alarming rate. 

“Yet, rather than look at how to properly address the problem, the government only continues to fuel the fire. As it stands, the planned expansion of the early entitlement offer will only place even more pressure on the sector and will result in even more settings buckling under the strain. The additional funding announced does not even come close to repairing the years of damage.  

“Early years providers go over and above to provide the very best care and education, the fact that 96% of setting remain good or outstanding is testament to that, but it should not be an uphill battle. 

“So, this time, we hope that calls to listen to providers will not be ignored and the government will work with the sector to make certain that the infrastructure, and importantly, the funding is there to ensure that England’s early years sector survives. Frankly, the way the sector has been treated is not only completely unacceptable but is coming dangerous close to reaching a point of no return.” 

Jonathan Broadbery, director of policy and communications at National Day Nurseries Association (NDNA) said: “Today’s data has to be a wake-up call for the Government. Nearly 5,000 fewer providers, 400 nurseries lost and 24,500 fewer places for children, all at a time when providers need to be gearing up to offer more funded places from April.

“Looking at the data for those delivering early years places, the picture appears even worse with a net loss of 650 pre-schools and nurseries. These figures back up our own analysis which showed another jump in the rate of closures among nurseries and with 98% of providers saying funding rates do not cover their costs it is clear why this is happening.

“The increase in funding rates in September will clearly be too late for many nurseries, resulting in children’s care and education being disrupted.

“Despite all the enormous challenges burdening the sector, we are very proud that 96% of nurseries and pre-schools are still outstanding or good, which is excellent news for children and families. They are working so hard to maintain that all-important quality of provision which makes such a difference to children’s lives.

“But inspections carried out since September show it is harder for providers to achieve a good or outstanding judgement. Various issues including the workforce crisis and cost pressures caused by Government underfunding are hampering efforts by nurseries to drive up quality.

“With reform of Ofsted on the table, especially the complaints process, it is important that the sector’s views are heard and any new processes are fit for purpose.”

Key data point

On 31 March 2023, there were:

• 63,200 childcare providers registered with Ofsted, down by 4,800 (7%) since 31 March 2022
• 27,900 childminders registered with Ofsted, down by 3,500 (11%) since 31 March 2022
• 1.27 million childcare places offered by providers registered on the Early Years Register (EYR), down by 24,500 (2%) since last year.