The greatest threat to nurseries is Government underfunding, not 'risky, financial operating models'

The report states -  Smaller nurseries in England are being bought up by profit-focused companies, without necessarily creating more places or investing more in staff.

Profit focused companies’, i.e ECEC [early care and education] providers focused on operating in a commercial manner to ensure the financial sustainability of setting, thus striving to deliver a surplus to ensure that they can reinvest to deliver high-quality childcare, will frequently appraise mergers and acquisitions with the creation of developing new places in mind.

For a variety of reasons some nurseries choose to trade with an "effective operating capacity" which may be lower than the permitted operating capacity. Potential acquirers will have this in mind when buying nursery businesses and in these cases frequently we see purchasers investing thereafter to facilitate any available increase in capacity. In relation to investing more in staff, so many ECEC providers that I work with daily, be they for-profit or not-for-profit, truly recognise the importance of investing in, renumerating, rewarding and professionalising the perception of the UK’s early years workforce – The key issue here which limits the ability for higher levels of investment is the level of chronic underfunding from government funding that ECEC providers receive.