One in four childcare providers fear permanent closure amid Covid-19 – survey

One in four childcare providers fear they will be put out of business within a year amid the Covid-19 pandemic, a survey suggests.

Nearly three in four (74%) nurseries, pre-schools and childminders feel that the Government has not provided enough support to them during the coronavirus crisis, according to the poll.

Childcare providers say they could be forced to make staff redundant, ask parents to still pay fees, and close their doors permanently after the Government announced it would limit the amount of financial support that some providers receive.

The Early Years Alliance (EYA), which carried out the survey, has warned that “abandoning” the childcare sector at this time will cause “untold damage” to the economy in the long term.

A quarter of early years providers (25%) in England say it is “unlikely” that their setting will still be operating this time next year, according to the poll.

The online survey, of 3,167 childcare providers, found that nearly half (47%) may need to make staff redundant and more than a fifth (21%) may need to retract offers to parents to waive or reduce their child’s fees due to the Government’s updated advice on financial support.

Last month, last-minute guidance from the Department for Education (DfE) said they would limit the circumstances under which childcare providers can access financial support from both the “free entitlement” funding scheme and the coronavirus job retention scheme.

The move prompted a nursery owner to launch a petition, which has been signed by more than 167,000 people, calling for a reversal of the decision.

Since March 21, early years settings have only been allowed to open to vulnerable children and those with a parent identified as a critical worker.

But the survey suggests that more than two in three (67%) childcare providers have had to close their doors temporarily amid the crisis.

Shauna Caulfield Gates, owner of Orchard Day Nursery in Brighton, was forced to close temporarily last week as she was “no longer able to sustain the losses”.

“I am so fearful about the future of my nursery, which is an outstanding provision. It remains to be seen if we will fold,” she said

Kay Howden, proprietor of Peter Pan Pre-School in Middlewich in Cheshire, is concerned that she may have to shut down permanently amid financial concerns.

She said: “We need to be able to fully access the furlough scheme in order to plan and remain buoyant in the future, and ensure that we will be able to continue to operate as the lockdown eases and ends.

“As it stands, we won’t have any reserves so if we don’t pick up for September, I anticipate us closing in the next 12 months.”

Neil Leitch, chief executive of the EYA, said: “The recent last-minute U-turn on the support that childcare settings can receive for furloughed staff in particular has had a hugely negative impact on the sector, and if not reversed, is likely to contribute to many avoidable redundancies and, in some cases, permanent closures.”

He added: “The reality is that abandoning the early years sector at this critical time will cause untold damage to this country’s economy in the long term.

“The Government must now accept that it needs to do much more to support early years providers in this country – otherwise, we may not have a functional childcare sector when this crisis is, eventually, over.”

Tulip Siddiq, Labour’s shadow minister for children and early years, said: “The childcare sector is on the brink of collapse. This survey is further evidence that the Government’s lack of support is forcing nurseries and other providers to close and sack staff.

“Losing a quarter of our childcare providers in this crisis would have a devastating impact on working families. Ministers need to wake up to the reality that many vital early years providers will be lost forever unless they step in to save our childcare.”

A DfE spokesperson said: “Nurseries, childminders and all other early years settings are playing a vital role in the response to coronavirus, by supporting critical workers and parents of vulnerable children with continued childcare.

“We have provided continuity in funding for the free childcare entitlements, and the Government has put in place a significant package of financial support for providers – this includes the coronavirus job retention scheme, which providers can access for employees whose salary is not covered by public funding. This principle applies universally across all sectors.”