CYP Now - Analysis: Early years - The economic realities of childcare

Childcare providers are increasingly running at a loss despite more money being spent on such services. Jo Stephenson investigates the causes and how providers are hoping to get themselves back on track after a difficult period for the sector.

On the surface the childcare market appears to be booming. Why then areso many providers struggling to balance their books?

Government-commissioned research shows the number of full daycare placeshas mushroomed in five years. But so too has the number that are makinga loss (Children Now, 31 May - 6 June).

Surveys by market research firm BMRB show that there has been an overallincrease in the number of childcare providers of all types making aloss.

But full daycare has been worst hit with a fifth of providers reportinga loss in their last financial year. Many more are just breakingeven.

It's an alarming trend, says the National Day Nurseries Association.

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