Fifth of nurseries in deprived areas face closure

Dan Parton
Tuesday, June 11, 2019

Nearly one in five nurseries in deprived areas of England are facing closure within the next 12 months due to the early years funding shortfall.

Some nurseries are having to charge extra for meals, to offset losses from the funded childcare scheme
Some nurseries are having to charge extra for meals, to offset losses from the funded childcare scheme

Independent research agency Ceeda found that 17 per cent of childcare providers in the most deprived areas of England anticipate closure in the next year - only eight per cent in the most affluent areas face such a prospect.

In addition, 43 per cent of providers admitted to making savings by cutting back on learning resources, while 19 per cent said they had lowered the quality of food they give to children.

Childcare organisations said the findings revealed the deepening funding crisis affecting the sector and called for urgent action from government. 

Ceeda's report, which combines analysis of provider's opinions and financial information with government data, revealed that the early years funding shortfall has risen by almost £50m in the past year to £662m.

Many providers are passing on the shortfall in income to parents; 18 per cent said they now require private hours to be taken alongside the government's flagship funded childcare offers.

Some providers are also limiting the number of funded places they offer, with 12 per cent capping places for disadvantaged two-year-olds and 15 per cent capping the number of 30-hour funded places.

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said that the organisation had been monitoring the number of nursery closures since 30 hours of funded childcare was introduced in September 2017 and found that it is increasing.

"We have been telling ministers that the 15 and 30 hours childcare schemes are not free either to parents or providers," she said.

"In more deprived areas, nurseries are less likely to survive because they cannot make up the shortfall through additional paid-for hours or by asking for voluntary charges from parents who can't afford them.

"This is a crisis and must be addressed immediately with adequate investment. Offering funded hours to children of working parents is hampering measures to improve social mobility in England. And yet these are the families this policy was brought in to support."

Neil Leitch, chief executive of the Early Years Alliance, added: "Thousands of providers have closed, many more are charging for things that were previously free and now we see the impact this is likely to have on the poorest children in the country.

"This report is just the latest in a growing list of studies, including several commissioned by the Department for Education, revealing government childcare policy is failing, even on its own terms.

"There's only one conclusion to draw from this: the government can no longer afford to underfund the early years. It must invest properly in its flagship childcare schemes and review the funding annually to make sure it stays in line with rising costs." 

However, a Department for Education spokesperson said that £3.5bn will be spent on early education entitlements this year.

"The government provides a significant package of childcare to parents and carers, including our 30 hours offer for working parents of three- and four-year-olds. Low-income families also have access to support through Universal Credit, which can cover up to 85 per cent of childcare costs.

"Our Early Years National Funding Formula allocates our funding to local authorities fairly and transparently. We recognise the need to keep our evidence base on costs up-to-date and we continue to monitor the provider market closely through a range of research projects."

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