‘We’re losing £40k a year’: Childcare sector hit by ‘chronic underfunding’ | UK News

Thousands of kindergartens have closed due to “chronic underfunding” – with parents left without childcare.

The total number of childcare providers fell by around 4,000 between March 2021 and March 2022, the biggest drop since 2016, according to figures from Ofsted.

The National Daycare Association (NDNA) blames “a combination of challenges” including “chronic underfunding” for the closure.

Its chief executive, Purnima Tanuku, told Sky News: “The crisis is so bad that we have never seen a situation like this since the last decade.

“That’s why we’re saying to the government that they need to put some urgent measures in place to be able to support providers to ensure they’re there for the long haul to provide that continuity of care and education for children and support families.”

At Cottontail’s nursery in Warrington, Cheshire, they have only had to pay up to £64 per day for each child to cover fitting costs.

Still, they are running at a loss.

“It makes absolutely no sense to keep trading when you’ve lost £50,000 in the last year alone,” says Harriett Butterworth, the nursery’s chief executive.

“However, because of the sector we work in – education and childcare – we operate as a charity and that goodwill can only go so far.

“Right now, the recruitment crisis that we are facing, where we are simply not able to recruit qualified staff because of the low wage rates, the fact that we have had rising charges in relation to gas and electric with a 300% increase over the for the past three years, and then the substantial government funding, the underbids mean my pre-school is losing the equivalent of £40,000 a year.”

If the nursery were to close, it would cause real problems for parents like Julie McKean. She and her husband both work full-time, and they have limited child care for their one-year-old son, Oliver.

“We don’t have a support network, so Oliver is in daycare full-time, so we couldn’t rely on parents,” she says.

“Either we need to look for another nursery or we, one of us, really need to rethink our working patterns.”

Julie McKean and her son Oliver use Cottontail’s nursery

Many parents living in England with children aged between three and four can currently get 30 hours of free childcare per week for 38 weeks a year.

NDNA says that the sector now urgently needs government support.

“This problem has been created by the government, because if the funding had kept up with cost increases – even in line with the national minimum wage – and the living wage and all these government-imposed increases, we wouldn’t be here in the first place,” Tanuku says.

“Funding is the key issue, because the government is the biggest purchaser of childcare in this country. So, as the big customer, if they don’t pay the prevailing price, there’s no way they can expect providers to deliver high quality safely and sustainably.”

Read more:
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A government spokesperson said £4 billion had been spent in each of the past five years to support families with childcare costs.

They added: “We know there are challenges facing the sector, which is why we are increasing funding to support employers with their costs, investing millions in better training for staff working with pre-school children and setting out plans to help suppliers run their businesses more flexibly.

“This includes plans to support more childminders into the market by reducing upfront costs.”

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