Dramatic fall in number of childcarers in England

Day nurseries in England received from the Government an average increase of only 11p per hour for delivery of the free early year’s entitlement for 2009, research by Laing and Buisson has found.

The Laing and Buisson 2009 Children’s Nurseries UK Market Report found that just under two-thirds (62 per cent) of settings said that Government funding still did not cover their childcare costs. This is virtually unchanged from 2008 levels and despite the Government telling local authorities to undertake a cost analysis process with local childcare providers to determine any gaps between the cost of delivering a free session and the level of funding.

Philip Blackburn, Senior Economist at Laing and Buisson, said, “Although an increase of 11p an hour is in line with inflation, no real increases in the entitlement means there has been no change to the current loss-making position reported by most nurseries.”

He warned that the recession was exacerbating the problems of funding sustainability by “putting downward pressure on childcare demand, keeping fees stagnant, and restricting access to bank lending and financial support for businesses.”

According to the Laing and Buisson report the UK day nursery market was worth £3.9 billion in 2008, growing by only 4 per cent during the year compared to 8 per cent in 2007.

The economic recession had made the vast majority of nursery businesses rein in their growth and development plans, and many more settings have become financially vulnerable, the report added.

Mr Blackburn said, “There has been a clear increase in the number of closures as many nursery businesses struggled to service debts during difficult economic times, and maintain occupancy at healthy levels.

“However, demand for nursery care has held up well despite rising unemployment and business contractions, with only a marginal fall recorded.”