Politics

Parents facing childcare 'chaos' with cash strapped providers going bust


Parents could struggle to access childcare places as nurseries, pre-schools and childminders are at risk going bust without cash injections

The Early Years Alliance (EYA) has said families may face childcare “chaos” as research suggests providers are facing large financial losses amid a lack of Government funding and reduced parental demand.

New modelling from independent research agency Ceeda has found that childcare providers in England were operating at average occupancy levels of just 37% on June 8, compared to 77% in spring 2019.

Even if the occupancy levels rose slightly to 45%, providers would incur average losses of £3.06 per hour on funded two-year-old places (a shortfall of 57%) and average losses of £1.96 per hour on funded three and four-year-old places (a shortfall of 43%) over the next 12 months, the data suggests.

The report suggests that early years providers would still face significant losses even if more parents started taking up childcare places again as the lockdown eases due to inadequate Government funding.

It comes as figures on Wednesday revealed that the number of childcare providers registered with Ofsted fell by around 600 over the first three months of the year.

Parents could find themselves without options the report warns

Neil Leitch, chief executive of the EYA, said: “The fact is that the early years sector is at a crunch point, and unless urgent action is taken, we are going to see many, many more settings forced to close their doors over the coming months.

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“This could mean chaos for parents – and particularly mothers – trying to access childcare in order to return to work at a time when the Government is desperately trying to restart the economy.”

He added: “Ministers must now commit to providing the financial support that childcare providers need to remain sustainable throughout this crisis and beyond. Anything less puts the long-term viability of the sector as a whole at risk.”

Judith Blake, chairwoman of the Local Government Association’s children and young people board, said: “While early years and childcare providers have been asked to step up in the same way that schools have in recent months, their costs have not been covered in the same way.

“These problems will not go away anytime soon. Limits on the number of children who can attend settings and reduced demand from parents mean that settings simply cannot raise the income they usually would. This is already putting businesses, jobs and childcare places at risk.”

Rebecca Long Bailey, shadow education secretary, said: “Childcare will be necessary for families to get back to work and for the economy to recover but the sector is at risk of collapse with many providers facing huge losses.

“The Government needs to think long term and take action prevent catastrophic collapse now.”





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