Nursery closures: Councils fear there won't be enough free childcare places to go around

The government’s expansion of free childcare for working parents of younger children in England may not be delivered universally due to capacity issues, councils have warned.

Analysis by the Local Government Association (LGA) suggests that nearly nine in ten councils (88%) are concerned nursery closures this year will be significant and will undermine sufficiency.

Figures released last week showed the number of childcare providers registered with Ofsted had decreased by 4,800 in the past year.

It comes as the government prepares to begin its new phased childcare policy from April next year, which will see more working parents of young children eligible for funded hours in early years settings.

But the LGA has concerns that improved funding rates will not be enough to ensure universal implementation of the extended 30 hours free childcare scheme.

Councils need stronger powers for commissioning provision centrally to ensure the right childcare is available in the right places, and the government should go further and faster on addressing the urgent workforce challenges in the sector, the LGA said.

It comes as the LGA hosts its annual conference in Bournemouth this week.

A survey of 98 local authorities in December and January suggests nearly half (48%) expected closures of early years settings last year to create risks to sufficiency in 2023.

“Insufficient income” to meet rising costs and “workforce-related issues” are among the key drivers behind some of the closures, according to the report.

The analysis was carried out before the Chancellor announced in March that working parents in England with children as young as nine months would be entitled to up to 30 hours a week of free childcare.

The offer will be available to working parents of two-year-olds from April next year, but initially it will be limited to 15 hours.

From September 2024, the 15-hour offer will be extended to children from nine months, and the full 30-hour offer to working parents of children under five will come in from September 2025.

Under the current system, working parents of three and four-year-olds in England are eligible for 30 hours of free childcare per week.

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Early Years Alliance chief executive Neil Leitch called the scheme "unbelievable" as the 'sector faces its most challenging time in decades.'

He added: “We know that settings are already closing at an alarming rate, with Ofsted data released less than a week ago showing that nearly 5,000 settings closed in the last year alone.

“We have no doubt therefore, that, in its current form, expanding the so-called ‘free childcare’ offers will only lead to further closures – and that rather than making it easier for parents to access high-quality early education and care, it will only make it harder."

The LGA is calling for a recruitment drive for the sector to be rapidly rolled out after its report found that a lack of appropriate staff has increasingly prevented nurseries from being able to deliver to their full capacity.

Some settings have been forced to shut rooms or close temporarily for weeks, while others have had to limit places for children with more complex needs.

Louise Gittins, chairwoman of the LGA’s Children and Young People Board, said: “The government’s extension of free childcare is a positive step towards helping working parents manage the high costs of sending their children to a nursery or childminder.

“However, we have serious concerns about the ability of local areas to secure nursery places, with capacity issues providing challenges to the universal rollout of the extended offer.

“Nurseries and childcare providers are already under massive pressure, grappling with severe financial and workforce challenges, which has seen staff numbers depleted and an acceleration in places closing.

“Alongside the improved funding rates, it is vital the government’s planned recruitment drive tackles the staffing shortages and provides an opportunity for staff to progress and thrive in a fulfilling career.”

Megan Jarvie, Head of Coram Family and Childcare, said: “While the promised extension of 30 hours funded childcare to children from the age of nine months is really welcome for parents, this research shows there’s a risk that it will not live up to expectations.

Our own research finds that childcare shortages are increasing - just half of local areas have enough childcare for working parents, and only 18 per cent have enough childcare for disabled children. 

"The extension of free childcare has the potential to be a game-changer for families struggling with childcare costs, but action is needed to make sure that there will be enough places for every family that needs it.”

A Department for Education spokesperson said: “We are rolling out the single biggest investment in childcare in England ever, set to save a working parent using 30 hours of childcare up to an average of £6,500 per year.

“To make sure there are enough places across the country we will be investing hundreds of millions of pounds each year to increase the amounts we pay providers to offer places and will be consulting on how we distribute funding to make sure it is fair across all areas of the country.

“We are also launching a new national recruitment campaign to support the recruitment and retention of talented staff and considering how best to introduce new accelerated apprenticeship routes so everyone from junior staff to senior leaders can easily move into a career in the sector.”

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