Nearly 9,000 childcare providers have closed since 2016

The bi-annual Survey of Childcare and Early Years Providers, published today, shows that the number of childcare and early years providers in England reduced from 90,300 to 81,500 over the two-year period – representing a loss of 8,800 providers.

• Nursery closures rise 66 per cent since 30 hours began
• Alliance blames lack of Government funding for closing fifth of settings
• Nursery owners' desperate measures to survive

Of those that left the sector, 5,700 were childminders, 2,100 were nurseries (‘group-based providers’) and 1,000 were school-based providers.

The research, carried out by Natcen on behalf of the Department for Education, is based on survey responses from 5,715 nurseries, 1,649 school-based providers and 1,240 childminders between March and July scaled-up to reflect all registered early years and childcare provision across England.

The figures, which do not take into account the number of providers that entered the sector between 2016-18, also show the number of childcare places fell by 251,700 between 2016 and 2018.

Other findings include:

• Close to half of nurseries (47 per cent) and one in five childminders (21 per cent) have increased their fees in the last year.
• 81 per cent of staff in nurseries are qualified to at least Level 3.
• For almost three-quarters of nurseries, their biggest cost is paying for staff, including wages, National Insurance payments and pension contributions.
• The biggest cost for childminders is providing meals, snacks and refreshments for children in their care.
• 40 per cent of staff in school-based nurseries hold a degree, compared to 13 per cent in nurseries and 9 per cent of childminders.

Sector response

The Pre-school Learning Alliance said the figures on closures and places were ‘incredibly concerning’.

Chief executive Neil Leitch said, ‘The sector has long warned that sustained childcare underfunding would lead to provider closures.

‘With staff costs still accounting for more than three-quarters of overall costs for group providers, and the national living and minimum wages due to rise in April, the financial pressure on early years providers is only going to get worse.

'And of course, it's not just providers who are affected by this, many parents are also feeling the impact of this underfunded Government policy.

‘It's time that the Government stops pretending all is fine and starts taking action to ensure funding levels to ensure funding levels actually cover the true cost of delivering quality childcare.’

The National Day Nurseries Association (NDNA) said the survey's figures on the number of staff with a Level 3 qualification ran counter to its own findings.

Chief executive Purnima Tanuku said, 'We have serious questions over the findings that levels of staff qualified to Level 3 or above is going up when our own workforce survey has shown a steady decline from 83 per cent in 2015 to just 66 per cent earlier this year. The survey only asked nurseries about “one or two members of their team” to give this data but it doesn’t ring true with our research and others in the sector, especially when you include apprentices in the calculation.'

She added, 'For years we have been warning the Government of the potential and actual impact of moving to their 30-hour funded policy without ensuring it was properly resourced. Now their own survey is telling them what this is doing to the whole childcare and early years sector.

'We want to see a well-funded and properly thought out plan for the future of childcare in England but concerns around training and support for staff remain. Providers are looking at a full blown recruitment crisis and without a strong plan to address workforce issues the Government is simply storing up larger problems for the future. Chronic underfunding impacts on providers’ abilities to attract higher qualified professionals or invest in and train their staff to higher levels.'

Labour's shadow early years minister Tracy Brabin said, 'We have repeatedly warned the Government that their underfunding of early years education and childcare would lead to providers closing their doors but they refused to listen and today we see the consequences.

'Fewer providers means less choice, so parents will find it harder to find the childcare that suits their family and too many simply can’t get the free childcare the Tories promised them at the last election.'

The Department for Education has been contacted for a response.