Up to half of nurseries set to close or reduce services they offer, survey warns
Parents will be forced to pay higher fees for childcare this year because of a lack of government funding, new research suggests. Nurseries and childminders are being driven out of business, while staff feel stressed, demoralised and even suicidal.
The Early Years Alliance (EYA), a membership organisation representing nurseries and childminders, has accused the government of turning a blind eye to the financial chaos hitting a sector dominated by low-paid female workers, which will be made worse when the national minimum wage increases by 5% on Sunday.
The government has frozen the rates it pays childcare providers to offer qualifying parents agreed hours of free government-funded care until 2020, leaving nurseries and childminders to shoulder the burden of higher wage bills while subjecting them to a real-terms funding cut.
A survey of EYA members, seen by the Observer, suggests two-fifths are likely to reduce staff over the next year as a result of this under-funding. Nearly half of providers fear they will go out of business in the next 12 months and 81% say they are so stressed about financial viability it is affecting their mental health. Six respondents said they had thoughts of ending their own life.
Many providers now plan to cut corners, while charging more. Of the 1,615 nurseries, pre-schools, childminders and out-of-hours clubs surveyed, 63% plan to increase fees and 40% will add extra charges for services, such as lunch and trips. Two-fifths will scale back staff training and 70% plan to spend less on equipment and resources. Almost a quarter plan to relax adult-to-child ratios.
There is a crisis looming, said Neil Leitch, EYA chief executive. Parents and providers know higher ratios mean higher-quality childcare. Any relaxation of ratios will create a two-tier sector those who can afford it have access to the right level of support and those who cant, dont.
Nurseries in deprived areas, where parents cannot afford to cover the shortfall in government funding rates, are among the least financially viable. Children with special educational needs and disabilities are also less attractive to providers now: 15% said they plan to offer fewer places to these children over the next 12 months, reducing the need for specially qualified staff. We will see marginalisation of some segments of the community. So if your child has special needs or youre poor, youre shifted off somewhere else, Leitch said. There is not enough funding and the government turns a blind eye to it.
Last week Ofsted revealed that 1,000 childminders left the sector in the last four months of 2018, representing a 3% fall in numbers. Fewer than 40,000 now remain in business.
Tracy Brabin, Labours shadow minister for early years, said: When settings are forced to reduce staff, the quality of education children receive suffers. Its time the government listened and acted.