The 2007 Childcare and Early Years Providers Survey carried out for the DCSF by BMRB found that the financial position of providers had ‘worsened', with the number of children's centre nurseries losing money rising from 37 per cent in 2006 to 52 per cent last year, while only 7 per cent made a profit.
It also revealed that daycare settings in children's centres had the highest average annual expenditure - £196,000 compared to £116,000 in childcare settings overall - and paid their staff an average of £9.30 an hour while employees of other full daycare providers earned an average of £6.90.
Steve Alexander, chief executive of the Pre-School Learning Alliance (PLA), said the ‘pressing issue of sustainability' had been brought into ‘sharp focus by the findings'. The charity's ‘overarching concern' was that childcare providers were ‘paying the price of inconsistent intervention in the childcare "market".'
He said the survey had demonstrated the fallibility of the Government's strategy which hinged on the belief that 77 per cent of all children's centres, which are located in deprived areas, should operate with sufficient numbers to make childcare sustainable.
‘The policy drive of getting parents into work through the provision of childcare has not yet resulted in demand for the large amounts of additional childcare being established in areas of deprivation. This challenges the sustainability of the provision and is a prime example of market interference,' he added.
The PLA also voiced concern about the survey finding that just under half of all full daycare in centres is run by local authorities, despite DCSF guidance that this should only happen as ‘a last resort'. Mr Alexander said this was "evidence that local authorities are functioning as both market manager and supplier which is surely a conflict of interest'.
Meanwhile the survey revealed that there were a total of 112,600 childcare and early years providers in England supplying a total of 2,494,000 places in 2007. A total of 96,400 settings were childcare providers and 16,200 were early years providers in maintained schools.
It said there was a ‘continued steady increase' in the number of full daycare providers to 13,600, up 74 per cent since 2001 and up 7 per cent on 2006. Sessional providers had ‘declined' by 9 per cent since 2006 to 8,700; after-school clubs had increased by 11 per cent to 8,500 and holiday clubs fell by 9 per cent to 5,800.
The National Day Nurseries Association (NDNA) noted that daycare vacancies had risen to 18 per cent and chief executive Purnima Tanuku emphasised that a minimum occupancy level of 80 per cent was ‘essential for a nursery to remain viable in the long term'. The survey said the highest rate of vacancies - 29 per cent - was among the 59,800 ‘active' childminders.