NEARLY nine in 10 councils fear that nursery closures in England this year will undermine capacity ahead of the rollout of the Government’s extension of the 30 hours free childcare scheme, new research by the Local Government Association (LGA) reveals. The LGA has concerns that while the improved funding rates are helpful, this will not be enough to ensure a universal implementation of the scheme.

The Chancellor announced in March that every child in an eligible working family aged from nine months to five years would be entitled to 30 hours of free childcare each week by September 2025. It is currently available to parents from the start of the next school term after a child turns three.

Under the expansion, the proportion of places delivered through government-funded entitlements is expected to go up to around 80 per cent – from just under 50 per cent now.

With councils responsible for directing the majority of childcare spending, their role will become even more critical in managing the market.

The LGA says councils need stronger powers for commissioning provision centrally to ensure that the right provision is available in the right places, including for example the ability to withhold free entitlement funding where a provider wants to open in an area where there is already plenty of provision.

The report by Isos Partnership, Nursery Closures: Research on the nature, impact and drivers of nursery closures in England, found:

  • Eighty-eight per cent of councils are concerned that nursery closures in 2023 will be significant and undermine sufficiency;
  • Fewer than half (48 per cent) of councils are fully confident of having sufficient childcare provision for children aged two under the current entitlements;
  • Forty per cent of councils saw a spike in nurseries closing in 2022, compared to the year before. Insufficient income to meet rising costs and workforce-related ssues are among the key drivers behind some of the closures.
  • It is also calling on the Government to go further and faster on addressing the urgent workforce challenges within the nursery and early years sector.

The LGA says there needs to be a wholesale review of the recruitment and retention challenges within the nursery and early years sector, where staff shortages are threatening early years education and childcare provision. The LGA is calling for a recruitment drive that improves routes into the sector to be rapidly rolled out.

The report revealed nursery owners and managers are facing the combined pressures of simultaneously managing hikes in utility bills, rent, insurance, food and staff wages, as well as the growing gap between delivery costs and government-funded entitlement rates.

A lack of appropriate staff has increasingly prevented nurseries from being able to deliver to their full capacity. This has meant some have been forced to shut rooms or close temporarily for days or weeks, while some settings have had to limit places for children with more complex needs.

The report also found that recruitment and retention challenges were greater in disadvantaged communities, where rising levels of poverty, complexity of needs and pandemic-related trauma are impacting on children, and that the challenge of supporting children in a context of stretched funding and limited specialist support is contributing to escalating departures of staff while placing greater burdens on managers.

Cllr Louise Gittins, Chair of the LGA’s Children and Young People Board, said: “The Government’s extension of free childcare is a positive step towards helping working parents manage the high costs of sending their children to a nursery or childminder. However, we have serious concerns about the ability of local areas to secure nursery places, with capacity issues providing challenges to the universal rollout of the extended offer. Nurseries and childcare providers are already under massive pressure, grappling with severe financial and workforce challenges, which has seen staff numbers depleted and an acceleration in places closing.

“Alongside the improved funding rates, it is vital the Government’s planned recruitment drive tackles the staffing shortages and provides an opportunity for staff to progress and thrive in a fulfilling career. Councils will also need to be given the right levers to manage local childcare markets, given the significant rise in government-funded places local areas will see.”

* Read Nursery Closures: Research on the nature, impact and drivers of nursery closures in England here.

* Source: Local Government Association