Low demand for childcare puts sector's future at risk as lockdown lifts
Derren Hayes
Monday, June 1, 2020
The childcare sector in England faces a fight for its survival, an industry body has warned, as latest research shows less than half of parents of pre-school children plan to take up places as settings reopen due to the easing of Covid-19 lockdown restrictions.
A survey of around 4,450 parents by the Early Years Alliance found that just 45 per cent are planning to take up their child’s place, while 42 per cent are not and 13 per cent are undecided.
The most commonly cited reason for parents not taking up their place was the concern that it was unsafe for their child, wider family and/or staff.
Last month, the government gave settings the green light to reopen from 1 June after it said its five tests for emerging from the lockdown had been met, but the survey findings suggest parents don’t trust the message from ministers.
When asked what would need to happen to take up their child’s place, four out of five respondents said a sustained fall in coronavirus cases across the country, while 58 per cent wanted more information from the government on the science underpinning the decision to reopen settings.
In addition, parents were asked to score the handling of the reopening of childcare settings, giving the government an average rating of 3.9 out of 10, with more than a quarter giving it a score of just one.
In a further blow to the sector, a fifth of parents taking up childcare said they would not be using as many hours as previously.
The concerns among parents about the lifting of the lockdown are mirrored among early years providers – 21 per cent surveyed by the alliance said they would not be reopening yet and 15 per cent were unsure.
When asked the reasons for not reopening, the majority cited safety concerns. Of this group, 42 per cent expect to reopen in September, but 18 per cent had no idea.
Of the 6,300 providers that responded to the survey, half expect demand to be below levels that they can operate at safely, while 69 per cent anticipate running at a loss for the rest of the year.
Neil Leitch, chief executive of the Early Years Alliance, said the findings highlight the “huge pressure” the early years sector in England is facing over the coming months.
“With most childcare providers limited as to how many children they can care for safely, and many predicting that parental demand for places will be lower still, many nurseries, pre-schools and childminders are going to face a real struggle for survival during this incredibly difficult period,” Leitch said.
“It is no exaggeration to say that the very future of the childcare sector is at risk if the government doesn’t get its act together and provide the support that providers need.
“Although much focus to date has been on the reopening of primary schools, with more than a million children normally accessing early years care and education, there is no doubt that early years providers will play a pivotal role in the overall recovery of the economy, and the ability of society to return to some kind of normality.
“It is vital, therefore, that the government takes the steps needed to safeguard the future of the early years sector. That means not only providing the clear, unambiguous reassurance that parents – and providers – need to feel confident that it is safe for children to return to childcare, but crucially, committing to a significant financial support package to help ensure that childcare providers are able to stay afloat throughout this challenging period and beyond.”
Tulip Siddiq MP, Labour’s shadow minister for children and early years, added: “With significantly less demand for childcare than usual, nurseries and childminders are going to be under extraordinary financial pressure in the weeks ahead.
“Over two thirds of nurseries and other childcare businesses expect to operate at a loss for at least six months, so without more support it is unclear how many will be able to survive.
“The government needs to wake up to the reality that millions of childcare places could be lost in this crisis unless there is a properly funded plan to save the early years sector.”
Meanwhile, early years groups have welcomed the announcement that the Coronavirus Job Retention Scheme and will be extended until the end of October, albeit with employers contributing payments in later months.
National Day Nurseries Association chief executive Purnima Tanuku said: “Having the job retention scheme in place to the end of October will help providers across the UK to adjust to their new operating reality as different national governments look to relax lockdown conditions over the summer.
“While we welcome this announcement and the flexibility it will give providers we need to see the detail of how it will be impacted by funded entitlement payments. We will be pressing the Treasury for information on this so that providers will know exactly where they stand before the scheme launches. Employers will need to see the guidance in good time so they can plan and work with their employees.
“Ensuring that the childcare sector is sustainable in the short and long-term will be essential for any wider re-opening of the economy, this is why we are also calling for a transformation and recovery fund for the sector to help meet fixed costs associated with the new operating reality.”
The extension of the Self-employed Income Support Scheme (SEISS) was also good news for childminders, said Pacey.
Liz Bayram, Pacey chief executive, said: "We welcome the announcement. We have been calling for this extension for some time. However, as our recent survey has shown, thousands of registered childminders are missing out from this much needed support. Many do not make a profit so were ineligible to apply as were many newly registered childminders. We remain extremely concerned that this highly flexible, quality childcare provision is at significant risk because of this.”
Bayram added that its survey of parents showed that many are wary of sending their children back to childcare.
"We need the current SEISS to be adapted to better support the many thousands of childminders who are unable to benefit currently," she said. "Furthermore we are calling for funding so that new start-up businesses, like registered childminding which require high upfront investment, can be supported as well as business loans for childminders. If this action is not taken, we are at risk of losing a significant cohort of new childminders, accelerating the already significant decline in the number of childminding settings that currently provide around 250,000 quality childcare places for families."