CYP Now - Two in five nurseries warn ‘closure is likely’ due to tax and wage rises

Nurseries are facing closure or having to increase fees for families due to planned increases in employer national insurance contributions and the minimum wage, warns the Early Years Alliance (EYA).

One in 10 childcare providers say they are likely to close due to cost pressures, DfE finds. Picture : Adobe Stock

Sector leaders want to see nurseries made exempt from the national insurance increase - Adobe Stock

Among 1,000 early years providers surveyed, two in five say “permanent closure is likely if government doesn’t take urgent action”.

More than nine in 10 also say they will increase fees for non-government funded hours following the increases, which were announced by Chancellor of the Exchequer Rachel Reeves in her Autumn Budget last month.

The EYA wants to see the government either exempt early years providers from the national insurance increases or provide them with the funding needed to cover the extra costs.

They also want to see minimum wage increases “adequately” funded.

One respondent says their setting is operating under a “loss making business model” and is set to close within two years following the NI and minimum wage increases.

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