Nurseries Count the Cost of Covid

Piggy bank next to COVID-19 safety measures

Nurseries count the cost of Covid


The true cost of a large scale event like the Covid-19 pandemic is often only truly known months or years after it has concluded. Until then, all that is usually available are the accounts given by individual business and a general perception that overall costs were high. However, work is now beginning to count the cost in the childcare sector. A recent survey of 406 providers, representing 1,251 nurseries by the National Day Nurseries Association (NDNA) has unearthed important evidence of the financial strain nurseries have suffered.

According to they survey, the average nursery lost £26,000 over the course of the pandemic, and only 15% expect to have made a profit in the last year, an increase from 44% in 2018, while 39% expect to just about break even.

While the country is now starting to get back on its feet, losses of this kind will have a knock-on effect as nurseries need to take careful steps to make them up. The NDNA found that 41% of nurseries have had to increase their fees, while 34% have taken out government backed loans. 95% of nurseries surveyed say that government funding does not cover their costs and so it is also not surprising that some are starting to limit the number of funded places available, as well as charging extra fees for items like food and nappies.

Although these figures make stark reading, the sector did receive some support during the pandemic, most notably through the furlough scheme, but also through the business rates holiday which most nurseries were able to benefit from. However, the furlough scheme is coming to an end and it is widely expected that business rates will be reintroduced in England – although in Wales, they have been expected for three years. Policy makers will therefore need to consider carefully how much ongoing support the sector will need.

The NDNA’s report, “The Stop Underfunding – Start Building Futures survey” can be read here.