Responding to a question in parliament, Ms Hughes said that over 20 per cent of registered childcare provision had closed in the period from April 2004 to March 2005, compared with 16.7 per cent in the previous financial year.
But she said that the data recorded for the first six months of the 2005/2006 financial year show that closures are in decline.
'Since April 2005, funding for local authorities has focused on sustaining existing good quality provision that meets local needs, rather than creating new places which may not match local demand and may put provision at risk,' said Ms Hughes.
Meanwhile, Ofsted's quarterly figures on the number of registered childcare providers and places show that the number of full daycare places and providers is continuing to rise steadily.
At the end of December 2005 there were 107,200 providers offering 1,522,500 places. There are now 12,900 full daycare providers - an increase of 300 since September and an annual rise of 900 since figures were published in December 2004.
The number of childminders is also on the rise, after a slump in the sector saw them drop by 1,000 from December 2003 to 71,000 in December 2004. But despite the increase of 400 up to 71,500, the figure is still down from March 2004, when 72,400 childminders were registered.
Out-of-school providers and creches have both recorded an increase of 100, while the number of sessional daycare providers has decreased by 100 and places have fallen by 3,100 to 241,100.
