Nursery closures increased by 50% this year, according to research by National Day Nurseries Association (NDNA). 

The NDNA found 72 more nurseries closed between September 2022 and 2023, compared with the same period the year before.

The analysis found closures were increasingly likely to take place in the areas of greatest deprivation. In the last academic year, 14.5% of nursery closures were in the 10% most deprived areas of England, compared to 12.7% in the previous year. Closures clustered in the city hotspots of Newcastle, Leeds, Bradford, Manchester, Birmingham and London

Purnima Tanuku, NDNA chief executive, warned underfunding was creating “childcare deserts”. “The fact that more closures happen in areas of deprivation continues to ring alarm bells,” she said. “These are settings which have more government funded places and are hit harder by underfunding.”

More than one third (36%) of closures took place between April and August, coinciding with cost increases which kicked in at the beginning of the financial year.

Tanuku commented: “The alarming rate at which nurseries are continuing to close puts in doubt the governments’ ability to deliver on their promise of more funded childcare from April 2024. Providers are currently facing significant pressures on their finances and yet the government’s funding simply does not cover their costs.”

The NDNA said many providers had not been told what rate they would receive from their local authority following the government’s announcement of an additional £204m.

The organisation said it was aware that not all local authorities plan to pass 100% of the funding through to providers through their base hourly rates, and that some local authorities will not pay the increased rate until later this term, causing major cash flow issues.