Its ‘Pulse survey of childcare and early years providers’, finds that for almost half of nurseries and childminders, their income is not sufficient to cover their costs – a ‘significantly’ higher percentage than in Winter 2021.
A total of 1,857 people took part in the survey November last year.
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To boost their income, 4 in 5 nurseries and childminders said they have had to make at least one change to help manage their finances -including increasing fees, caring for children and implementing additional charges.
Reducing spending on food and energy
A total of 70 per cent have reduced spending on food, materials or equipment and 56 per cent have reduced their energy consumption.
The survey finds energy bills have increased by an average of 50 per cent.
Nearly 40 per cent said the reduction on spending had made services ‘worse’, however 47 per cent said it hadn’t made a difference.
According to the survey, 10 per cent of nurseries and childminders that responded said it is ‘likely’ they will have to close.
The Early Years Alliance (EYA) said the findings demonstrate ‘how risky’ the Government plans to expand funded childcare are, while the National Day Nurseries Association (NDNA) said it was ‘extremely concerned’ about the sustainability of the sector.
Workforce
Key findings on workforce include:
- 49 per cent of nurseries had one or more staff vacancies.
- School-based settings reported a much lower turnover of staff than nurseries.
- The most common reason for leaving a provider was ‘better pay’, particularly those working for private nurseries, rather than school-based provision.
- Three-quarters of headteachers and owners/managers of nurseries reported spending more time on recruitment and two-thirds, more money.
Purnima Tanuku, chief executive of the NDNA, said, ‘Workforce issues are a key challenge otherwise the sector will not be able to offer additional places the Government promised. Childcare providers need urgent meaningful support now before they can deliver any expansion of funded hours.’
'It's clear the existing system simply isn't working.'
Neil Leitch, chief executive of the EYA, commented, ‘When nearly half of providers say their income is not covering costs, 1 in 10 say imminent closure is likely and the vast majority are reporting staffing challenges, then it’s clear the existing system simply isn’t working.
‘Worse still, as the report highlights, despite providers’ very best efforts, continued cost pressures and an urgent need to reduce costs are now starting to impact the quality of education and care they are able to offer.
‘Rather than piling even more pressure on the sector through ever-bigger promises of ‘free childcare’, the Government needs to focus on fixing the problems that it itself has created through years of underfunding and neglect.’
Childminding agencies
The majority (79 per cent) of childminders who took part in the survey were at least ‘slightly aware’ of childminder agencies (CMAs). Just 3 per cent were already registered with an agency, rising to 1 in 10 in the most deprived areas.
Most (60 per cent) said they would not consider joining a CMA, while 23 per cent had considered doing so and 7 per cent said they had ‘seriously’ considered it.
The most common reason for joining an agency was ‘access to training’, followed by ‘communication and advice on DfE policy and regulations’. However, the loss of an individual Ofsted rating and fees were deterrents to registering.