Nurseries go bust in ‘fragile’ sector

30 Aug

The number of nurseries going bust has almost doubled in the past year because of the “soaring costs” of childcare, according to accountancy firm Moore Stephens.

The national living wage, high staff-to-child ratios and Government administration costs were cited as factors in 29 nurseries becoming insolvent in England and Wales in 2015/16, compared with 16 in 2014/15 – a rise of 80%, the firm reported.

Voice General Secretary Deborah Lawson commented:

“There is no doubt that nurseries have experienced increased operational costs at a time of falling family incomes, which tax credit  and benefit changes have contributed to, as have low levels of nursery education funding.  

“As such there is a continued over reliance on the goodwill of the early years and childcare workforce, many of who are highly qualified, having funded much of their own training, and experienced, but earn little more if anything over the minimum wage. They enter the childcare profession, which has no formal career or salary structure, to make a difference to children’s lives.  They give selflessly of their time, to provide the best for all children.  Their caring disposition has been taken advantage of for too long. 

A Government report into the cost of childcare last year suggested that nursery education providers could achieve efficiencies through better staff deployment, going on to say that hourly costs could be reduced by deploying staff efficiently within the statutory staff child ratios.  Most providers and their staff teams are unwilling to maintains minimum ratios because they know how it can compromise the quality of care and education.  This is despite the higher costs they incur, but because they know, not only is this best for children, it also contributes to better working and employment conditions for staff. 

The early years sector is provide by a mixed market, a market which will struggle to expand to deliver the extended entitlement of free nursery education and childcare unless it is properly resourced and recognises and rewards the qualifications, skills and experience of early years professionals.  Until it is, the sector will continue to be somewhat fragile, where local markets can be destabilised as a result of small local changes.” 

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