More than 10,000 providers likely to be out of business by end of lockdown

More than 10,000 childcare providers in the UK are likely to have folded or gone out of business by the end of the coronavirus lockdown, with leaders saying the sector has been “crushed” by financial instability and a fall in demand.

A survey by the Childcare online platform found nearly one in six of more than 2,000 providers said they were likely to have permanently closed because of the Covid-19 pandemic, while one in three said they were unsure if they would be able to reopen.

Just 50% of the childminders, daycare centres and nurseries surveyed said they were likely to remain open after the lockdown ends.

In England alone the results would mean a loss of about 150,000 childcare places currently available for children under school age.

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The Childcare survey found that out of those likely to close permanently, nearly three-quarters blamed financial difficulties. But the remainder said they expected fewer parents to be able to afford or need the childcare they had previously employed.

Richard Conway, Childcare’s founder, said it was “shocking” to discover how many providers were likely to close.

Conway said a previous poll had found that many parents were considering keeping their children at home after the lockdown ended, meaning providers were likely to suffer. “But, as other parents plan to head straight back to the office, hopefully the business of childcare will pick up,” he said.

According to Department for Education (DfE) figures, there were more than 23,000 private daycare centres or nurseries and nearly 40,000 registered childminders operating in England before the advent of coronavirus this year.

About half of childcare providers appear to have remained open since the lockdown began in March, with access restricted to the children of key workers. Many report a shortage of personal protective equipment and cleaning supplies, similar to schools and care homes.

The likely closures follow the government’s reversal of a policy that would have seen nurseries receive their government-funded childcare entitlement, even if they shut during the lockdown, allowing them to continue paying rent, wages and bills.

The education secretary, Gavin Williamson, said at the time the lockdown began in March: “We will continue to pay for all free early years entitlements places, even in the event that settings are closed on the advice of Public Health England, or children are not able to attend due to coronavirus, and we will not be asking for funding back from local authorities.”

But on Wednesday the government announced that local authorities would be able to redirect funding away to those settings that remained open.

Tulip Siddiq, Labour’s shadow minister for children and early years, said: “Childcare is the fourth emergency service in this crisis, and I know that the government does not want the early years sector which provides it to collapse. So I am urging ministers to rethink this decision and come forward with a proper funding plan to ensure that childcare providers can stay open and survive this crisis.”

The Early Years Alliance said providers had told it that local authorities were reducing the level of funding given to settings that had temporarily closed, in order to offer additional funding support to those which are open to key worker families and vulnerable children.

Neil Leitch, the chief executive of Early Years Alliance, said it was unacceptable for the government to “continually move the goalposts” for the sector and deprive childcare providers of support they had budgeted for.

“While we of course recognise the desire of government and local authorities to do all they can to support providers to stay open for key worker families and vulnerable children, this should not be at the expense of providers who have closed, given that many have had no choice but to take the difficult decision to do so,” Leitch said.

A DfE spokesperson said: “Our first priority is ensuring that critical workers and vulnerable children are able to access the childcare places they need at this time. Local authorities will continue to receive free early education entitlement funding throughout the Covid-19 outbreak, and a wide range of support is available for early years providers.”