The analysis by the National Day Nurseries Association (NDNA) found that 72 more nurseries closed compared with the same period the year before.
More nurseries closed in areas of deprivation. In the last academic year alone, 14.5 per cent of nursery closures were in the 10 per cent most deprived areas of England. This is on top of 12.7 per cent that closed in the 10 per cent most deprived areas the previous year.
According to the NDNA, closures were accelerating at a time when nurseries are usually at their busiest. Over one third (36 per cent) of closures happened in the summer between April to August. This coincided with the cost increases that came into effect at the start of the financial year.
The research shows:
- In the academic year 2022-23 (data up to 8 September 2023) there were 216 nursery closures in England compared with 144 during 2021-22.
- Closures in the top three areas of deprivation are in the city hotspots of Newcastle, Leeds, Bradford, Manchester, Birmingham and London.
‘We are seeing a reduction in the number of nurseries when you would expect to see more capacity being created for an expansion.'
Purnima Tanuku, chief executive of NDNA, said, ‘The alarming rate at which nurseries are continuing to close puts the Governments’ ability to deliver on their promise of more funded childcare from April 2024 in doubt.
‘What we are seeing is a reduction in the number of nurseries when you would expect to see more capacity being created for any expansion. This is because the Government is not taking full account of increased staffing costs, higher energy prices, food price hikes and a workforce crisis.
‘The fact that more closures happen in areas of deprivation continues to ring alarm bells.
‘The Government must take urgent action to support every childcare provider to be able to deliver sustainable childcare that is accessible and affordable for all if they are seriously committed to their promise of the expansion of funded childcare from April 2024.’
New funding rates
The NDNA says that many providers are still trying to find out what funding rate they will receive from their local authority following the announcement of an additional £240m from the Government.
It claims that some local authorities won’t be passing on 100 per cent of the funding to providers and others won’t be able to pay the new increased funding rate to settings until later this term, causing nursery businesses ‘major cash flow issues.’
Case study – nursery owner in the East Midlands who has closed half of the nurseries she operates.
She said, ‘I have had to close two nurseries as the costs became too much to bear. This has affected my health and had an impact financially.
‘Covid increased costs with additional borrowing needed. To recover these costs, we would need to increase our income to cover this increase in borrowing costs.
‘My funding rate for three and four-year-olds has increased by 5 per cent overall, not each year. In comparison, staffing costs have increased by 33.9 per cent. Food and other costs have also risen.’
