Childcare reports highlight high staff turnover and funding problems

Childcare reports from the Department for Education show high staff turnover and funding problems among childcare providers.

Small child playing with brightly coloured bricks on the floor in a childcare setting


Less than half of nurseries say their income is not covering their costs and over half say that their total costs have significantly increased on pre-pandemic levels, according to three reports released this week by the Department for Education.

The reports show that 54% of nurseries and pre-schools and 49% of childminders report that their total costs have notably increased since before Covid-19, with 34% of nurseries and pre-schools using business contingency reserves to manage their setting finances. 49% of childminders have had to use their personal savings. Some private childcare providers have raised their fees to offset the rise in costs, but childminders have not tended to put their charges up.

With numbers of children attending nursery still down on pre-pandemic levels, only 39% of private providers and 21% of voluntary providers were in financial surplus in 2021. For childminders, this fell to just 19%.

The reports also state that setting managers “identified low funding as one of the main causes of instability in their settings” and that they raised concerns that the relaxation of ratios would be “an unsuitable approach that could impact on the quality of childcare provision and increase workload and dissatisfaction among staff’. Among their fears for the future, childcare professionals said staffing and delays in child development were their major worries.

On staffing, private nurseries are suffering from staffing shortages to a much greater degree than school-based ones with every nursery having an average of one vacancy to fill each. Around one in five group-based providers had a staff turnover rate of over 25% compared with 7% of school-based providers.

On average, private nurseries and preschools reported an average turnover rate of 28%, compared with 11% for school-based providers, with low pay being a significant factor. 47% of private and voluntary nurseries and pre-schools say the main reasons for staff leaving is for better pay, while 60% say that those leaving are leaving early years sector entirely.

72% of private and voluntary nurseries and pre-schools have lost staff since the start of the pandemic, with 40% reporting a turnover rate of over 25%.

Neil Leitch, CEO of the Early Years Alliance, said: “As these reports show, there has never been a more difficult time to run, manage or work in an early years setting.

“A combination of inadequate government funding, severe staffing challenges and the ongoing impact of the pandemic has created a perfect storm of challenges – one that has left far too many settings on the brink of permanent closure.

“For years, we have warned the government that without urgent action, the early years sector would be left in crisis – and now, here we are. And yet, rather than look at what steps it could take to actually support the early years, the government is wasting time looking at deregulation and ratio relaxation, despite the fact that this will worsen the recruitment and retention crisis, lower quality and make absolutely no difference to costs for parents.

“What we need is a clear, comprehensive strategy for the early years sector, one that prioritises the provision of quality early education alongside affordable childcare for parents, and recognises that substantial investment is needed to make any of this possible. Anything less is just a waste of all our time.”

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