Nursery closures increasing over the summer

New figures from the National Day Nurseries Association show a big rise in nursery closures this summer term amid fears of the impact of rising prices.


The year ahead could see record closures of nurseries due to cost of living pressures affecting thousands of children, according to the National Day Nurseries Association [NDNA].

Its research found that 65% more nurseries closed this summer term this year compared to 2021. It says Ofsted statistics show a 76 net reduction in the number of nurseries from April to June 2022 – compared to a net gain for the same period in 2021. 

While the number of new providers in early 2022 outweighed the number of closures, this came on the back of an underlying trend towards closure which has picked up in the summer, says the NDNA, as costs have increased. Ofsted statistics from September 2021 to March 2022 show a net reduction in nurseries of 196 – compared to a net gain of 20 providers in the first half of the year. Insolvency data since April 2019 shows that the average number of pre-primary education business insolvencies has increased by 71% from September 2021 to April 2022 compared with the same period in 2019/2020.

The most deprived areas are disproportionately affected by nursery closures – 34% of closures from April 2021 to March 2022 are in the top 30% areas of deprivation, compared to 27% in the top 30% most affluent areas with 15% of closures being in the top 10% most deprived wards. This compares to just 8% of closures in the 10% most affluent parts of the country.

Purnima Tanuku, Chief Executive of NDNA, said: “Most nurseries are small businesses and, similar to the picture in other sectors, these are hugely impacted by rocketing fuel costs, inflation and chronic underfunding. But nurseries have also had to pay unfair business rates which tax the space they give children to grow, explore and develop.

“We are expecting minimum wages to go up again as low paid workers grapple with inflation in double figures. Meanwhile, qualified early years practitioners are leaving the sector to take up better paid work elsewhere, leaving nurseries struggling to recruit.”

She added that the challenges nurseries are facing can be sourced back to inadequate funding by the government of early years places for three and four year olds and disadvantaged two year olds.

She said that the disproportionate impact on deprived areas is particularly concerning because early years settings in deprived areas are more reliant on funded-only places, meaning they are more affected by the shortfall in funding.

She added: “Children from lower income families are most at risk of falling behind their peers by the time they start school and never catch up. High quality early education is the best way to support them. They must be able to access places to give them the best chance in life.”

The NDNA is calling for an urgent increase in childcare funding rates to at least keep pace with inflation and minimum wage rises due to be announced in autumn (for April 2023); Government support on recruitment and retention, allowing childcare to be added to the shortage occupation list for European visas and supporting  bridging qualifications to allow more people to enter the workforce; and the removal of business rates and VAT for childcare businesses in line with schools and academies.

Judith Ish-Horowicz, who owns and runs a nursery in Wandsworth, London, said: “My nursery has had consistent outstanding ratings from Ofsted. We have been open for more than 30 years. It has never been as difficult as it is now.

“Government funding is so inadequate, I don’t understand why we are not either funded adequately to pay good wages, commensurate with early years expertise, or added to the priority list of shortage skills so we can appoint staff from abroad.

Ish-Horowicz, who has not been able to pay herself in the past year and has had to dip into her savings to stay afloat, adds: “I know of no other sector that is expected to subsidise the government. The government promises free education for three to four-year-olds but does not pay enough for the staff to be paid a living wage or for their employers to reward their commitment and professionalism in educating and preparing children for life as well-balanced, productive, skilled adult citizens.”

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