Local authorities predict permanent closure of childcare settings in January

Following the Government’s announcement last week that it will stop free entitlement funding at pre-Covid levels, starting from 1 January, 58 per cent of local authorities believe that this will result in permanent closures of local early years settings.

The new research also revealed that a quarter (26 per cent) of local authorities said that they expect to see providers reduce the number of free early education entitlement places on offer, which is of particular concern as these places are shown to narrow the achievement gap between disadvantaged children and their peers.  

The Coram Family and Childcare charity published the findings today (22 December) as part of its briefing on the impact of Covid-19 on the childcare sector.

It warns that closures are likely to lead to greater shortages in childcare availability for families, in a system that was already under pressure pre-pandemic.

Over a third (35 per cent) of local authorities report that the number of providers permanently closing in their local area has increased in the last year. 

But although the majority of local authorities said that they have not yet seen an increase in childcare shortages, the report states that this could be due to the fact that 73 per cent have seen a decrease in demand from families over the pandemic, likely because of changes to employment or reluctance to use childcare because of concerns about the spread of the virus.
If many providers close permanently, the charity warns that this could mean significant shortages in childcare supply if and when demand for childcare returns to pre-pandemic levels. 

The report also highlights concern over the availability of childcare for children with special educational needs and disabilities (SEND) and school-age children, with local authorities more likely to see a reduction in the number of places compared to demand in both these areas.

Coram Family and Childcare’s annual Childcare Surveys, published prior to the pandemic in February 2020, identified that there were already significant childcare shortages for these groups of children.  

Megan Jarvie, head of Coram Family and Childcare, said, ‘The ending of additional Government support for childcare is going to be a blow for many childcare providers and the families who depend on them. We all rely on the childcare sector to support the learning and development of children and to enable parents to work. There are already signs of the pressure on childcare providers - a third of local areas already report an increase in nursery closures, and shortages are increasing in some areas. It is vital that the sector is supported so that every family can find the high quality childcare they need.’

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said that this is ‘really heartbreaking’ for families and childcare providers.