Childcare sector voices concern over energy support cuts

Nurseries and childminders have raised concerns over the government’s decision to reduce energy-bill support for businesses, as the early-years sector continues to grapple with rising prices and staff shortages.

The government has this week announced that, under a new one-year scheme starting in April, businesses will get a discount on wholesale prices. This will result in less support for many businesses than the current support scheme, causing particular concern for small businesses, a category that includes many childcare providers.

“It is incredibly concerning to learn that energy support for businesses is set to be significantly scaled back,” Neil Leitch of the Early Years Alliance, which represents over 14,000 nurseries, childminders and pre-schools in England, said in a statement. “As our recent research has shown, many early-years providers are already being forced to pass the rising cost of energy onto parents or, in the worst cases, close their doors completely.”

The number of registered childcare providers fell by 4% between August 2021 and March 2022, and it has consistently shown a net decline in recent years, official data show. In addition, National Day Nurseries Association (NDNA) data show that higher numbers of nurseries closed down last summer as compared to the previous year. Childcare closures are often concentrated in disadvantaged areas, where families often need support the most.

“If there is no more than the basic level of help for nurseries through this [energy support] scheme, then the government must look to other ways to protect our vital early-years sector,” Purnima Tanuku, NDNA chief executive, said in a statement. Campaigners have long called on the government to invest more in childcare and have pointed out that its spending in this area lags that of many other developed countries.

The government first introduced an energy support package for businesses last autumn, as energy prices shot up and spurred the UK’s ongoing cost-of-living crisis. Under that scheme, energy costs were capped for all businesses – but the Chancellor Jeremy Hunt has previously warned that it was too expensive to be extended.

Tough times for childminders

The Early Years Alliance also pointed out that the reduction of energy-bill support would be extremely tough for childminders, who often work out of their own homes. The net decline in the numbers of childcare providers has been driven by large numbers of childminders leaving the sector.

“We know that many childminders are having to take extreme action, such as not heating their own homes in the evenings and weekends to ensure that children attending their settings can remain warm during the week, as the result of soaring energy bills,” Leitch said.

“The fact that childminders work out of their homes does not change the fact that they are businesses. As such, it is vital that they are given additional support to ensure they can cope with the rising cost of energy.”

The Federation of Small Businesses (FSB) also voiced concerns about the scaled-down support, pointing out that the Covid pandemic had already dealt a blow to small businesses in recent years and forced many to close down.

“[The] decision to all but eliminate help through the Energy Bill Relief Scheme is a huge disappointment for small businesses,” Martin McTague, national chair of the FSB, said in a statement. “Many small firms will not be able to survive on the pennies provided through the new version of the scheme.”

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