One in four nurseries could close without bailout, warns industry

NURSERIES have warned of mass closures with a quarter at risk of shutting within a year, as providers demand an urgent government bailout to prevent the looming crisis from unfolding.

Childcare providers could face funding shortfalls of 55 per cent for every place offered to three and four year olds, according to Ceeda, researchers for the early-years sector.

Their findings are included in a report by the Early Years Alliance (EYA), which found that a quarter of the 3,000 childcare providers they surveyed in April felt it was “unlikely” they would be operating in 12 months.

A separate poll carried out in May revealed that 69 per cent of providers expect to operate at a loss over the next six months.

The findings reignite fears over the precarious future of the childcare sector, which has suffered huge financial losses due to reduced demand for places since the lockdown.

Under coronavirus guidelines, nurseries, which were allowed to reopen on June 1, are limited to a maximum of 16 children per group – who must be kept in a social bubble.

But early-year leaders have warned that the stringent rules coupled with a sharp drop in the number of children who returned to take up their places are making many businesses unviable.

Neil Leitch, the chief executive of the EYA, which represents 14,000 nurseries and childminders, said: “Even in areas where parental demand for childcare places remains high, providers are restricted on how many children they are able to care for under government guidance, which is going to place even more financial pressure on them over the coming months.

“The early-years sector is at crunch point, and unless urgent action is taken, we are going to see many more settings forced to close. This could mean chaos for parents trying to access childcare in order to return to work at a time when the Government is desperately trying to restart the economy.”

Nurseries shut in late March at the same time as schools to all but the children of key workers and the most vulnerable youngsters.

In its report, titled The Forgotten Sector, which is due to be published today, the EYA is calling for the Government to help pay for PPE and additional staffing, among other recommendations.