Nursery capacity in Britain is far outstripping demand, with more than one tenth of nursery places now vacant, according to a survey published last week.
The Laing and Buisson survey of more than 700 daycare nurseries across the UK found that while capacity rose 16 per cent in the year to January 2003, demand fell by 9 per cent, leaving a vacancy rate of 13.5 per cent.
The rise in registered places from 390,500 to 453,000 has been largely attributed to Ofsted standardising child:space ratios, so eliminating some social services' stringent space requirements, and registering new places in many day nurseries. However, places have not been filled quickly, with the number of children attending both full- and part-time falling from 446,400 to 408,000.
Although the final results of the survey are not due to be published until next month, Laing and Buisson economist Philip Blackburn said he expected 'the trend will be the same'.
He said he believed that new nurseries may not be filling up as anticipated, and population trends may be a contributing factor to the fall in demand.
But he added, 'I suspect that higher fees may be a deterrent to demand and parents may be shifting to cheaper provision.'
The survey revealed that day nursery fees rose 8 per cent last year to an average of 122 a week (five full days), with fee inflation being driven by large hikes in staff wages.
A survey by the Daycare Trust published earlier this month put the rise in overall daycare costs at 6.7 per cent (News, 6 February).
The Laing and Buisson report said the hourly rate for qualified staff now stood at 6.09 (up 12 per cent) and 4.68 (up 7 per cent) for unqualified staff. It said that steep rises in staff pay stemmed from the continuing recruitment crisis, with 19 per cent of nurseries describing recruitment as 'much more difficult' and 39 per cent describing it as 'more difficult'.
ChildBase managing director Michael Thompson said, 'There's no question that growth is beginning to slow.' But he believed that while there are pockets of overprovision, there are still areas with huge underprovision, principally in London.
Philip Rhodes, chief executive of Asquith Court, which now has 100 nurseries, expressed optimism about the state of the market. 'By and large from our experience, the market is still pretty strong. Clearly there are pockets of economic effect, but on the whole it's sound and it's growing,' he said.