CYP Now - Childminders and nurseries that rely on parent fees ‘risk closure after lockdown’

Childcare providers relying on parent fees rather than free entitlement funding are most vulnerable to closure after lockdown, sparking concerns over a shortage of placements, new research has warned.

Childminders relying on parent fees risk closure, the IFS warns. Picture: Adobe Stock

A new report by the Institute of Fiscal Studies (IFS) highlights that while many providers were facing financial difficulties before the pandemic, a total loss of income from parent fees since settings were forced to close in March has put as many as a quarter of private-sector nurseries at risk of running a significant deficit during lockdown.

The IFS states: “That’s more than double the number which were running a significant deficit prior to the pandemic and is despite government support through continued public funding and the substantial furlough and self-employment schemes.”

Despite childcare providers being allowed to reopen in early June, by the start of the summer holidays demand for childcare places remained 70 per cent below pre-crisis levels, the Challenges for the childcare market: the implications of Covid-19 for childcare providers in England, report states.

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