Childcare sector facing chronic shortages and mass closures concerned about Government expansion pledge

The Government’s promise of an expansion in state-funded childcare has triggered major concern within the sector as it faces funding shortages, a consequent mass exodus of staff, and the resulting closure of nurseries across the UK.

Jeremy Hunt made this pledge alongside a range of measures aimed at boosting economic growth in Wednesday’s Spring Budget speech. He promised up to 30 hours a week of free childcare for eligible households in England with children as young as nine months, instead of three and four-year-olds under the current policy. The phased plan aimed at removing barriers to work, which will be fully introduced by September 2025, will be worth up to £6,500 a year for working families.

The chancellor announced that funding paid to nurseries will be increased by £204 million from this September rising to £288 million next year. But Save the Children estimate this would only cover a tenth of the government funding required to meet the cost of free places, with its Institute for Public Policy Research report suggesting the figure is £2.1 billion.

Jeremy Hunt’s announced a range of measures aimed at boosting economic growth in Wednesday’s Budget (PA)
Jeremy Hunt’s announced a range of measures aimed at boosting economic growth in Wednesday’s Budget (PA)

Meghan Meek-O'Connor, a senior policy adviser at the organisation, said the sector is “very worried” about the funding gap. She explained, “The ideas behind the proposal are very good - but without the proper funding, this could lead to stagnating wages, which means staff will just leave because it’s much better to be employed somewhere else. Then this will lead to the closure of more childcare places.”

In contrast to the Government’s intended effect, this might lead to parents being forced to stay home after all, as the demand for childcare places outstrips the supply.

Nursery closure rates have already been increasing over recent years. National Day Nurseries Association’s analysis showed a 87 per cent rise in the number of nurseries shutting down between April and December 2022 compared with the same period in 2021. According to Ofsted, 5,400 early years settings closed in the year to August 2022.

Neil Leitch, CEO of Early Years Alliance, an organisation that supports providers and runs nurseries in deprived areas, said he has been forced to close over half of his nurseries over the past four years, with numbers dropping from 132 to 60. Over the same time period, he said at least 700 of his staff have left.

Mr Leitch, who came from a single-parent family and spent time in a care home, said, “I’m devastated by the fact that these are children that really need support. It’s devastating to see them pushed to the side. I was fortunate enough that people took a chance on me. Personally, it’s an awful situation.”

He described the sector as “on its knees” and already experiencing a recruitment and retention crisis. “We’ve got a sector where staff are leaving in droves because they are exhausted,” he said. “And what does the chancellor suggest? That you take on more children. The Chancellor knows the sector is already at capacity. Rather than adequately reward people, all he does is say to take more children on board.”

An Early Years Alliance survey on sector staffing carried out in October 2021, which received just under 1,400 responses, found that 84 per cent of respondents said they were finding it difficult to recruit suitable new early years staff. Mr Leitch said the top three reasons cited to him for leaving are feeling undervalued, exhaustion, and a desire for better pay.

Sarah Dunne, 47, described the nursery she works at, Little Pioneers Nursery & Pre School, Watford South, as “already quite stretched with staff”. She said finding qualified, enthusiastic staff who are prepared to work the long hours required of the job is difficult.

“If we’ve got more children, how we’re going to do that I don’t know,” she said, adding: “We won’t be able to provide the quality needs the children desire and should have.”

She believed the Government is “out of touch”, because “they aren’t on the ground doing the work”.

Mr Leitch said, “Nothing was said today about improving the life chances of children. It was all about the economy, money - there was not a single word about children.”