Early years capacity warning ahead of free hours expansion

Joe Lepper
Wednesday, July 5, 2023

Councils are warning that an escalation of nursery closures linked to the cost-of-living crisis “will undermine capacity” ahead of government plans to extend free childcare.

Factors in closures include lack of income and rising costs, including rent, wages, food and utility bills, according to the LGA. Picture: Adobe Stock
Factors in closures include lack of income and rising costs, including rent, wages, food and utility bills, according to the LGA. Picture: Adobe Stock

Nine in 10 council representatives surveyed fear closures will put the plans, which include offering working parents of two-year-olds 15 hours of funded childcare a week from April next year, at risk.

The Local Government Association (LGA) published survey found that two in five councils saw an increase in nursery closures during 2022 compared with the previous year. Four in five councils believe nursery closures in 2023 “will be significant”.

Factors in closures include lack of income and rising costs, including rent, wages, food and utility bills.  

Fewer than half of councils are confident their area already has enough childcare places locally to meet current entitlements for children aged two and under, the survey also found.   

The LGA is concerned that government funding being offered to settings to meet the expansion of so-called free hours “will not be enough to ensure a universal implementation of the scheme”.

Half of places are currently through funded hours, but this is set it to increase to four in five, warns the LGA.

As part of the government’s plans working parents of children from the age of nine months, rather than the current threshold of three years old, will be entitled to 30 hours of funded childcare a week from September 2025.

Stronger commissioning powers among councils could help alleviate capacity pressures to help ensure provision is opened where it is most needed, said the LGA. This could include withholding free entitlement funding where a provider wants to open in area “where there is already plenty of provision”.

Also being called for is a “wholescale review” of workforce issues in early years as well as a recruitment drive to tackle staff shortages. The LGA warns that lack of available staff has already forced some providers to close parts of nurseries or temporarily close.

“The government’s extension of free childcare is a positive step towards helping working parents manage the high costs of sending their children to a nursery or childminder,” said LGA children and young people board chair Louise Gittins.

“However, we have serious concerns about the ability of local areas to secure nursery places, with capacity issues providing challenges to the universal rollout of the extended offer.

“Nurseries and childcare providers are already under massive pressure, grappling with severe financial and workforce challenges, which has seen staff numbers depleted and an acceleration in places closing.”

According to the National Day Nurseries Association (NDNA) there has been a 50 per cent increase in nursery closures over the last year, with areas of deprivation being hardest hit.

NDNA chief executive Purnima Tanuku says the LGA’s findings are a “clear warning” to ministers that expansion of funded hours “risks failure without interventions to support the sector”.

“For years we have been showing how nurseries are facing increasing pressures due to spiralling costs and chronic underfunding,” she said.

“Now councils are joining providers and parents in showing real concern for the viability of future expansion if we don’t fix the current system.”

Between August 2021 and August 2022, 302 nurseries and preschools closed and the number of childcare providers including childminders fell by 5,400, according to figures released by Ofsted.

“It is frankly unbelievable that the government wants to expand the 30-hour offer at a time that the sector is facing its most challenging time in decades,” said Early Years Alliance chief executive Neil Leitch.  

“We know that settings are already closing at an alarming rate, with Ofsted data released less than a week ago showing that nearly 5,000 settings closed in the last year alone. 

“We have no doubt therefore, that, in its current form, expanding the so-called ‘free childcare’ offers will only lead to further closures – and that rather than making it easier for parents to access high-quality early education and care, it will only make it harder.”  

Children with disabilities are set to be among the hardest hit by a lack of available places to meet the government’s expansion of free childcare, warns Coram Family and Childcare.

“Our own research finds that childcare shortages are increasing - just half of local areas have enough childcare for working parents, and only 18 per cent have enough childcare for disabled children,” said its head Megan Jarvie.

"The extension of free childcare has the potential to be a game-changer for families struggling with childcare costs, but action is needed to make sure that there will be enough places for every family that needs it.”

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