Provision
Fall in 2009 demand for nursery places matches rise in fees
Demand for nursery places fell by 4 per cent last year, as recession hit and some families opted for informal childcare arrangements, according to Laing & Buisson's latest report on the childcare sector.
Children's Nurseries Market Report 2010 says that while average spending by families on childcare fell, this was offset by a rise in demand for employer-supported childcare through vouchers and workplace nurseries. Nurseries also had a boost from the roll-out of the final phase of the children's centres programme.
During 2009, the total number of nursery places fell by an estimated 8 per cent due to a fall in nursery stock (down 3.6 per cent).
However, the report says that the sector 'probably fared better than many other services and industries' during the recession.
Occupancy is rising again with an average of 82.5 per cent in March 2010, compared with 79.5 per cent last March.
Meanwhile, nursery fees, which the report says have barely grown in real terms over the past five years, rose by 4 per cent - twice the rate of inflation.
The value of the market for the calendar year 2009 is estimated at £3.88 billion.
Author of the report, Philip Blackburn, said, 'The nurseries market has suffered as falling demand left many nurseries vulnerable, compounded by more restrictive bank lending, and concerns over the sustainability of local authority funding for threeand four-year-old places.
'Bank lending is gradually becoming more accessible, and poorer performers have exited the market, to some extent easing competitive pressures.'
He added, 'Local authority early years funding is likely to remain tight, and upward cost pressures are a long-term feature as regulators and customers demand that nursery staff become better qualified.'
Further information
'Children's Nurseries Market Report 2010' costs £695 from www.laingbuisson.co.uk
