The number of childcare providers in England has fallen by nearly 9,000 since 2016, resulting in a decrease of 251,700 childcare places, according to Government statistics.
The annual Survey of Childcare and Early Years Providers report says the overall number of providers is estimated to have fallen from 90,300 in 2016 to 81,500 in 2018. The number of group-based providers fell from 25,700 to 23,600, the number of school-based providers fell from 17,900 to 16,900 and the number of childminders fell from 46,600 to 40,900.
The number of registered places in group-based providers is also down from 48 in 2016 to 45 in 2018. However, the number of places in school-based nurseries has risen. There has been a decrease in the average number of places in school-based before and after school provision, particularly after school provision [down to 30 places on average from 36 in 2016]. Almost all group-based after school activity providers had spare capacity.
Staff was the biggest cost for group-based providers. However, just over one-tenth (11%) of group-based staff aged 25 and over received hourly pay below the National Living Wage, much higher than school-based nursery staff and reception staff.
Group-based providers were most likely to have increased fees in the last year. Among providers that charged fees, almost half (47%) of group-based providers, 14% of school-based nurseries and 21% of childminders had increased their fees for at least one age group in the previous 12 months.
The majority of childcare and early years providers were offering parents of eligible 3 and 4 year olds the
extended 30 Hours Free Entitlement at the time of survey, including 90% of group-based providers, 67% of school-based nurseries and 77% of childminders. Similarly, group-based providers were most likely to have signed up to receive Tax-Free Childcare payments. At the time of survey, 82% of group-based providers, 43% of school-based nurseries and 62% of childminders had signed up to receive Tax-Free Childcare payments.
Neil Leitch, chief executive of the Pre-school Learning Alliance, said: “The sector has long warned that sustained childcare underfunding would lead to provider closures. As such, it is incredibly concerning to see the government’s own statistics estimating that we’ve lost almost ten thousand providers – accounting for over 250,000 childcare places – since 2016.
“With staff costs still accounting for more than three-quarters of overall costs for group providers, and the national living and minimum wages due to rise in April, the financial pressure on early years providers is only going to get worse. How many more are we likely to see close before the next set of statistics are released?”
The report is published on the day the All Party Parliamentary Group for Childcare and Early Education launched an inquiry into sustainability in the childcare sector. The first two sessions of the inquiry will take place on Wednesday 14 November. Leitch added: “After years of underfunding, there can be no denying that the childcare sector in England is now facing a full-blown crisis…This inquiry represents a vital chance for both providers and parents to get in front of parliamentarians and put across the impact of underfunding clearly and comprehensively. We hope that those ministers and decision-makers responsible for the long-term sustainability of the childcare sector will be listening closely.”