Parents face struggle to find nurseries or childminders as pandemic leaves providers bankrupt

Maya Oppenheim reports on the long-term impact of coronavirus on the childcare sector

Roughly two thirds of early years providers decided to close their doors after the government implemented the coronavirus lockdown - with many of the nurseries and childminders attributing their closure to financial issues (Getty)

Parents will struggle to find nurseries or childminders to send their children to as providers are sent out of business by the coronavirus crisis, experts warn.

Roughly two-thirds of early-years providers decided to close their doors after the government implemented the lockdown - with many nurseries and childminders attributing their closure to financial issues.

The majority of services that decided to stay open are losing money due to a sharp drop in demand in the wake of the coronavirus crisis.

Research by Early Years Alliance found less than half of parents are planning to take up their childcare place on Monday – often citing safety fears – despite the government allowing childcare services to take children in from today.

Neil Leitch, chief executive of the Early Years Alliance, which represents, nurseries, pre-schools, and registered childminders, told The Independent that the childcare system was in “major crisis”.

He said: “The pandemic has made the whole thing really unstable. Before this crisis, it was in a really difficult position. We’ve been underfunded for more than a decade but successive governments have ignored that fact.

"Research we did during the coronavirus crisis found one in four nurseries, pre-schools and childminders in England say it is unlikely they will be in existence in 12 months time. Providers will go by the wayside.

“Early years continues to be neglected despite the fact we are part of the social infrastructure. In the outset of the Covid-19 crisis, early-years providers were asked to open up for key workers’ children. They put their personal health at risk even though nursery groups might only have one or two children in. This was economic suicide. It appears the government has wiped their hands of early-years providers.

“If you are a school and there is only one child, you still get all your funding, but that is not the same for early years providers. They are left to fend for themselves. The government seems to have turned their back on us and that will have serious consequences. One provider which has been going for 50 years serving thousands of children just told me they are closing their doors. It shows the value that we have put on people that care for our youngest children during the most important years of their development.”

Mr Leitch argued many childcare providers will not survive through the public health emergency if they are not given interim transitional funding by the government – explaining new “processes and procedures in a post-Covid world” of operating in bubbles and imposing social distancing will require extra staff to implement than were needed before the pandemic.

He noted the coronavirus crisis and forthcoming economic recession could drive childcare costs up as cash-strapped providers require extra money to stay afloat.

Grandparents previously provided childcare support, he added, but the coronavirus shielding guidelines mean this is no longer an option for many parents.

Mr Leitch said he has written to the chancellor, education secretary and children’s minister about the manifold issues facing the childcare system but was still awaiting responses.

“Clearly this is not top of their agenda,” he added. “Which is appalling. While they dilly and dally about an effective response, childcare providers are closing their doors.”

Research by Early Years Alliance found more than two-thirds of providers predict they will function at a loss in the next half a year – with the organisation warning parents choosing for their children not to return to early years providers puts services at risk of closure.

The Organisation for Economic Co-Operation and Development (OECD) previously found the UK has one of the most expensive childcare systems in the world.

Mandu Reid, leader of the Women’s Equality Party, told The Independent some childcare providers have increased their costs during the lockdown. She said: “Coronavirus has put childcare in extreme peril and this is not an exaggeration. What we have is a situation where the government has treated childcare as an afterthought at best or completely overlooked it at worst during this crisis. We are looking at 10,000 childcare providers to have gone out of business by the end of lockdown. That equates to up 250,000 childcare places.

“In my view what needs to be done is a bailout. We bailed out the banks in 2008. We are talking freely and comfortably about bailing about airlines. You need to put childcare in place so parents don’t have to chose between childcare and work. More often than not it is the woman who stops working to do the childcare. How is having a large proportion of the workforce unable to go back to work serving the economy. Childcare is one of the main things which contributes to gender inequality. We have the most expensive childcare system in Europe and among the most expensive in the world. That is one of the most significant contributors to the gender pay gap.”

The Local Government Association has called for further funding to support all early years providers during the Covid-19 emergency.

While (ministers) dilly and dally about an effective response, childcare providers are closing their doors

Neil Leitch, chief executive of the Early Years Alliance

The government performed a U-turn on the amount of support nurseries, pre-schools, and childminders who employ assistants can get via the Coronavirus Job Retention Scheme, which caused outrage and anxiety among service providers.

Purnima Tanuku, chief executive of National Day Nurseries Association, said: “We know from our members that a lot of nurseries which have stayed open during this crisis to support NHS staff are running at a loss, with some losing thousands of pounds a week.

“Most nurseries have told us they cannot access the small business grant of £10,000 and other forms of business support. If they are worried about their long-term future sustainability, they do not want to get themselves into more debt by taking out loans.”

Almost a fifth of parents have been forced into quitting their jobs due to the extortionate cost of childcare in the UK, a study last Autumn found.

The research, by campaign group Pregnant Then Screwed, found the high price of childcare causes financial anxiety in 84 per cent of households. For many parents, childcare costs are equivalent or even more than the amount of money they make at work.

Vicky Ford, children and families minister, said: “Early years professionals have made heroic efforts to support families at this difficult time and I am grateful for the way they have worked with us to make sure we support parents and keep children safe.

“We have been working very closely with the sector as we begin the wider opening of settings, and have provided significant financial and business support to protect them during these unprecedented times.

“It’s testament to the great impact nurseries, preschools and childminders have on children’s education and the reassurance they offer families that so many parents are confident in returning their child to childcare this week.”