Early years providers 'struggling to keep costs down' amid record inflation

It says that providers are already having to pass on their increasing costs to parents, which is unsustainable as families struggle to pay their own rising bills.

This leaves nurseries facing the threat of closure which “causes heartbreak for the local community and can be devastating for a young child”, according to NDNA chief executive Purnima Tanuku.

• Plans to reduce cost of childcare: pros and cons of five proposals

• Stop plans to relax early years ratios in their tracks

The NDNA has made the warning as Office of National Statistics figures show the consumer price index rose to 10.1 per cent in July. This is the first time the UK has had double digit inflation since 1981.

“As inflation soars into double figures pushing up costs, so too does the cost of delivering high quality early education and care,” said Tanuku.

“Obviously childcare providers cannot keep passing on that cost to parents who are already trying to cope with all their other rising bills.

“We know that nurseries are doing everything they can to keep costs down for parents, but they need to remain sustainable as businesses too."

She added that childcare costs in parts of the UK are among the highest among developed countries due to the low government funding for the sector.

The Department for Education has increased funding rates by a maximum of just 3.8 per cent and just two councils in Scotland have “come close to keeping pace with inflation”, Tanuku said.

In contrast the Welsh government has increased funding by 12.5 per cent.

“If our governments invested sufficiently in our child’s earliest years, then both parents and providers would be able to concentrate on supporting our children’s development instead of trying to juggle their finances,” she said.

“If providers could pay higher wages to their dedicated and qualified staff, it would help with recruiting and retaining staff too.”

Meanwhile, charities supporting children are among others to be hit hardest by rising costs, according to Jamie O’Halloran, an economist at think tank Pro Bono Economics.

He has warned “this is an all-hands-on deck crisis” for the not-for-profit sector, with foodbanks, baby banks, debt charities and those supporting families’ mental health, among those to experience the immediate impact of inflation “most intensely”.

Children in care are another group of young people impacted by inflation, warns Katherine Sacks-Jones, chief executive of care charity Become.

"We are now staring down the barrel of a crisis which will have devastating and long-lasting consequences for those children who most need support and protection."

Read @KatharineSJ's blog on the impact of the #CostOfLiving crisis on young people 👉https://t.co/P3uJlnp85Y

— Become (@Become1992) August 17, 2022

She said that the UK's already overwhelmed care system will struggle to provide support amid rising costs “which will have devastating and long-lasting consequences for those children who most need support and protection”.

This week a coalition of charities and campaigners urged the government to more than double support for vulnerable families to tackle rising food and energy bills. Households with children should be a priority for support said the coalition, whose members include Save the Children and The Children’s Society.