Community nurseries under pressure in childcare crisis

Community nurseries cater to some of the most disadvantaged children, but face more financial pressures than most.

Child Playing


Last week, an Early Years Alliance survey showed that 89% of nurseries in England are probably or definitely increasing their fees this year by an average of around 8%.

More than a third say it is likely that rising costs will force their setting to close within the next year, with a quarter (25%) describing this as “somewhat likely” and almost one in ten (9%) stating it would be “very likely”.

Other research, including a report from the London Mayor and another from the Sutton Trust, suggests that nurseries in the most disadvantaged areas are the most likely to close.

Community nurseries

It’s a worrying picture, but even more so for community nurseries which cater to the most disadvantaged parents. The non-profit-making organisations nurseries are subsidised so their fees tend to be significantly lower than private nurseries. Some local authorities buy or subsidise places, but they may also offer paid for places to working parents. Unlike other nurseries, they cannot charge top-up fees and they face restrictions when it comes to raising their fees.

Jacqueline Moulder, manager of St Paul’s Church Nursery School in Dorking, Surrey, explains their predicament. They run subsidised sessions for disadvantaged two year olds as well as three-hour sessions for older children at a cost of £25 a go. The Government subsidy only covers £14.72 per child, meaning for every session and every child they lose £9.  Jacqueline adds that the money the Government pays for a space has only gone up by around £5 since the scheme was introduced 16 years ago.

What’s more is that there are fewer parents able to pay for the three hours at £25 for younger children since Covid and the cost of living crisis. Instead they are waiting to take advantage of the subsidised scheme for three and four year olds, through which the nursery loses money.

Many are also mixing and matching – using the free care and then, if they need additional hours, getting a family member, friend or childminder to pick up their children and look after them. Jacqueline adds that parents are also more likely since Covid to send their children in sick because they can’t afford to miss work. That has a knock-on impact on other children and staff.

New figures from money app Plum show a third of parents are having to scale back on essential items, such as groceries, to pay for childcare, with many unable to access the support they’re entitled to because information is inaccessible or confusing. They have joined together with childcare organisations including the National Day Nurseries Association to add their voices to calls for much greater investment in childcare.

Staffing shortages are also a big issue for nurseries. St Paul’s Church Nursery School has 26 children per session, with more on their books – all aged two and over. There are only five members of staff, most of them part time, and a management committee of volunteers overseen by the church. Jacqueline reckons she is only paid for a fifth of the hours she actually works. Her manager’s salary is just £18 an hour.

Out of the money her nursery receives they will also have to fund increases in overheads linked to inflation, ongoing professional training and a rise in the national minimum wage. Two of her staff members are on Universal Credit. She wants them to be paid more, but budget wise it is a huge headache for her.


Three community nurseries in Jacqueline’s area have closed down in recent years because they cannot make the finances add up and hers is one of two remaining. She says her nursery has only survived this far because the church stopped asking for rent.  It has also managed to raise funds for some resources, including a bench that children can sit on when doing forest school. One grandparent donated money for a climbing frame and a Wendy house. “We’re really frugal,” says Jacqueline, “but we’re still trying to do amazing things.”

Jacqueline says the reports of proposals to increase the number of subsidised places to include children from nine months onwards or targeted increases in places for younger children may get good headlines, but she fears they will make the financial situation for nurseries like hers much worse if the subsidy remains less than the actual cost of a place. “I fear that if the Government doesn’t invest substantial amounts of money into early years we will be a casualty,” she says. “It breaks my heart. The Government doesn’t seem to understand the impact their underfunding is having.”

The value of early years education

The nursery is rated outstanding and all the staff have had their children there. You can sense Jacqueline’s passion for the job and her pride in what the nursery is achieving despite the financial challenges. She says the only reason she can afford to do the job is because of her husband’s wages. She feels there is a misunderstanding of the value of high quality early years – for preparing children for school, addressing social equity from the bottom up and giving them a good foundation for learning throughout their lives, helping them build their social skills – much needed after Covid and addressing behavioural issues.

And she adds that after years of neglect by the Government – including during Covid – she is wary about the current interest in early years, driven in large part by the labour force shortages and the need to get parents back in work.  She says any commitment to early years needs to be substantial and not just about the headlines. She adds that she could easily get a job at a supermarket that is better paid, but she loves her job. “I’m proud of what I do. We are doing our best, but we have this feeling of impending doom,” she states.

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