NDNA Cymru recently conducted a survey that has revealed the shocking pressure providers in Wales are under

National Day Nurseries Association (NDNA) Cymru surveyed respondents across 102 private, voluntary and independent nurseries and discovered that 91% expect to make a loss or just break-even.

Government funding for the Childcare Offer and early education has remained stagnant since 2022 meaning the funding gap is growing against a backdrop of steeply rising costs.

Looking at staffing bills alone providers expect to see an average increase of 15.2% compared to 14.7% last year. The survey showed that providers are working hard to support families by keeping fee increase to 9.3%.

A shocking 97% of providers say their funding rate for the Childcare Offer for Wales, which is currently £5.00 per hour, does not cover their delivery costs. This compares to 90% in 2023.

When the NDNA asked providers about the funding shortfall as a result, the average response was £1.91 per child per hour. This amounts to a startling £2,177 per child across 30 hours of early education and childcare offer across the year.

Purnima Tanuku OBE, chief executive of National Day Nurseries Association (NDNA) Cymru, said: “It is clear from our survey results that the financial strain on early years providers is relentless.  It really is time for the Welsh Government to commit to reviewing their funding rates to ensure sustainability for the sector.

“The minimum wage rise in April will further impact on the rising costs our nurseries in Wales are experiencing and the stagnant funding rate is simply not enough to cover their operating costs. 

“If 91% of nurseries in Wales expect to make a loss or break-even this is just not sustainable. As a result we are likely to see more settings close. If settings cannot generate any surplus then they cannot invest in staff or improving their learning environment.

“These are challenging times for early years providers and families and we see our nurseries working hard to keep their fees as low as possible. However, when your biggest customer, the Welsh Government, has not been keeping pace with rising costs this becomes more difficult every year.

“We need to see Ministers take urgent action to support providers with hardship payments that were available during Covid as well as a long-overdue review of funding rates.”

The survey also found that early years providers were keeping fee increases below their rising costs, but were having to increase them more than last year.  The average increase in bills to families was 9.3%, compared to 7.4% in 2023, with a 15.2% increase in staffing costs.