Warning over the rise in nurseries going out of business

THE NUMBER of nurseries going bust has almost doubled in the past year because of the “soaring costs” of childcare, according to a leading accountancy firm.

The national living wage, high staff-to-child ratios and Government administration costs were cited as factors in 29 nurseries becoming insolvent in England and Wales in 2015/16, compared with 16 in 2014/15 – a rise of 80 per cent, the firm reported.

Accountancy group Moore Stephens said the younger a child is the more expensive the care and warned costs could spiral further as nurseries may have to raise fees.

The average hourly cost of caring for a two-year-old is £5.87 versus £4.25 for three and fouryear-olds. Further, the average staff-to-child ratio is approximately 1:3 for two-year-olds and 1:6 for three and four-year-olds, the firm said.

They also claimed some parents are “forced to take” unpaid leave from their jobs because of the closures as it is “hard to find an alternative at short notice”.

Deborah Lawson, general secretary of education union the Voice, said tax credit changes and low levels of nursery funding have led to “a continued over-reliance on the goodwill of the early years and childcare workforce,” whose “caring disposition has been taken advantage of for too long”.

Minimum guidelines for staffto-child ratios “can compromise the quality of care and education”, and most providers choose to have a healthier balance despite “higher costs” because it is “best for children” and workers, she said. She added the sector would “struggle” to provide free nursery education and childcare “unless it is properly resourced and recognises and rewards the qualifications, skills and experience of early years professionals”.

A new government scheme offering 30 hours of childcare a week to working parents of three and four-year-olds is to be piloted in York next month. It is scheduled to be rolled out across the rest of England in 2017. The PreSchool Learning Alliance, a charity which specialises in early years education, warned some nurseries could opt out of the scheme.