A comprehensive survey probing private, voluntary and independent nurseries’ financial sustainability has uncovered a dire picture with 85% of childcare businesses in England making a loss or only breaking even.
Ahead of the Comprehensive Spending Review, National Day Nurseries Association (NDNA) reveals the shocking landscape in which nurseries and childcare settings are operating, with 95% of respondents saying the Government funding for three and four-year-olds doesn’t even cover their costs.
As a result of the Covid-19 pandemic, the average nursery has lost more than £26,000 over the past year due to absences or closures. A shocking 39% of nurseries who responded expect to make a loss this year. Only 15% expect to make a surplus which is essential for investing in their staff and facilities to offer the best learning opportunities for their children.
Only three years ago these figures were reversed, with 43% expecting to make a surplus and 19% making a loss.
The situation is even worse for nurseries operating in the 20% most deprived areas, where 46% of providers expect to make a loss. These nurseries have on average a higher proportion of government-funded children (72% compared to 55% national average) so they suffer more from the shortfall between funding and delivery costs. A larger proportion (84% compared with the national average of 79%) also say their two-year-old funding is not sufficient to deliver places. These nurseries tend to have more children eligible for these places, so it has more of an impact on their sustainability.
NDNA says that the precarious financial instability of the private and voluntary nursery sector in England – which delivers between 70 to 80% of all funded places – has deteriorated significantly. This is largely due to Government underfunding.
Early years education is the best way of reducing the attainment gap and giving each child the best start in life. Rebuilding children’s futures must now be a political priority and top of the list for the Treasury.
The survey, which received 406 responses representing 1251 nursery sites, also revealed:
- The average funding rate paid to providers for three and four-year-old places is £4.43
- The average shortfall for each child per hour is £1.87 or £2,132 per child a year
- 56% of nurseries have received the full 6p increase this year; 16.8% received lower than 6p but 28% have had no increase at all in April 2021
- The average funding rate paid to providers to deliver eligible two-year-old places is £5.33, with the average shortfall of £1.57
- In the average nursery an average of 55.2% of children are Government-funded; parent-paid hours make up 44.8% of children
- Financial challenges are leading to 14.2% limiting the numbers of funded places they can deliver
- 13.7% have limited places to children with Special Educational Needs and Disabilities (SEND) who are those that need early intervention the most, however the cost to providers is higher
- Due to the funding rate shortfall, 41% have had to increase charges to parents by more than inflation (2%) and 22.8% have increased charges to parents for consumables (e.g. meals)
- 34.3% have taken out a Government-backed Covid-19 loan
- Reintroducing business rates would see the average nursery hit with a bill of £12,640.58
- Across nurseries, they have an average of 8.6% increase to their staffing budget.
Download a copy of the report at www.ndna.org.uk/startbuildingfutures
Part of a longer press release at https://www.ndna.org.uk/NDNA/News/Press_releases/2021/Government_is_underfunding_us_95_of_nurseries_say.aspx
HERitage stall this Saturday 29th January at St Cuthbert's hall, Amble. Come along, see you there