Exclusive: North East sees decline in nursery providers twice the national rate during pandemic

The pandemic has “made worse what was already a precarious situation” for childcare providers, says the Education Policy Institute.

Sunderland saw the highest decline of any district.
Sunderland saw the highest decline of any district.

The North East lost early years childcare providers at twice the rate as the rest of England during the pandemic, data analysis by NationalWorld can reveal.

Analysis of Ofsted figures shows that between March 2020 and August 2020, the North East lost 34 early years providers.

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That was a 1.5% decline over the five-month period, twice the 0.7% decline across England as a whole.

Nationwide, almost three early years providers were lost every day on average during the first five months of the pandemic, with a fall in childminders driving the majority of the decline.

The findings suggest that providers struggled to remain viable through the first lockdown, when all but vulnerable and key worker children were instructed to stay at home.

In September 2020, an Institute for Fiscal Studies (IFS) report warned the first lockdown was “likely to have damaged the financial health of many childcare providers, even after accounting for major government support programmes”.

It estimated that a quarter of private sector nurseries unable to collect parent fees during lockdown may have run a “significant deficit”, with at least £5 of costs for every £4 of income.

For childminders, it estimated almost 30% who lost parental fees were likewise earning less than £4 of income for every £5 of costs in the early part of 2020.

Additional lockdowns, it warned, could further damage the health of the sector.

“An already-precarious situation”

Sara Bonetti, director of early years at the Education Policy Institute (EPI), says the pandemic worsened an “already precarious” situation for the childcare sector, with nurseries struggling to manage budgets and recruit staff pre-Covid.

It seems likely, she says, that the drop in demand for childcare during the pandemic has driven the decline in providers, with nurseries often relying on extra parental fees to subsidise the cost of providing the 30-hours free allowance for three and four year olds.

Childminders, meanwhile, have been particularly hard-hit as most are self-employed, with many “already barely breaking even before the pandemic”, she continued. .

According to a 2020 survey from the Professional Association for Childcare and Early Years (PACEY), as many as one in five childminders may have been ineligible for the government’s Self-Employed Income Support Scheme (SEISS).

Ms Bonetti said regional variations in the decline of early years providers may be down to a multitude of factors, with “the North more affected by regional lockdowns”, while disparities in employment and numbers of people on furlough may have also influenced demand for care.

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‘Nobody wanted the nursery to close’

Sunderland saw one of the largest declines in early years providers of any English district between March and August 2020, losing 4.1%.

Since then, the second and third lockdowns have continued to create financial pressures for nurseries like Hetton-le-Hole in Houghton le Spring, which is set to be closed by Sunderland Council in August 2021 in spite of mass objections from parents.

The nursery’s deficit has been growing for some time, with the drop in demand created by Covid compounding its problems.

Natalie Hutchinson, whose four-year-old daughter Harriet attends the nursery, says she is “really upset” about the forthcoming closure.

In spite of having a nursery school closer to her home in Durham, Natalie travels to Hetton-le-Hole specifically for the quality of care staff are able to give her daughter, who has multiple health problems and a diagnosis of Autism Spectrum Disorder (ASD).

Though Harriet was already set to leave nursery in August, Natalie says many parents have been left in “a desperate situation” by the closure.

“Ultimately, I would like to have another child in the future, and I don’t know where that would leave me childcare wise. it would make life really difficult,” she continued. .

“Nobody – none of the parents – wanted the nursery to close.”

In a Joint Statement, Sunderland City Council and Together for Children said:

“Early years, nursery and child care provision are all popular services and have good take-up levels across Sunderland.

“While many key workers continued with child care provision as the country went into lockdown in 2020, there was a decline in take-up as other parents and children stayed at home together.

“As Covid restrictions are lifted and schools open again, we are seeing take-up increase.”

‘The real test will come in September’

Ms Bonetti said it is difficult to judge the full impact of the pandemic on the sector, with demand still at a lower level than it was previously.

The end of furlough in September and the winding down of other financial support schemes will be “the big turning point”, she said, adding: “It’s then that parents might have a hard time finding a suitable childcare provider.”

Gender equality charity the Fawcett Society has warned that such a scenario will have a knock-on effect on womens’ career prospects, who are more likely to do the lion’s share of childcare in the home.

“Our collective efforts to increase rates of maternal employment could be in vain if a lack

of access to childcare presents a barrier to the workplace,” the charity wrote in an open letter to the Chancellor last year.

Ms Bonetti added that providers face a further challenge with funding formulas due to be based on earnings and demand as of January 2020 – during the third lockdown.

“What is needed in my opinion is at least a quarterly revision of the support that’s needed,” she said.

“Nurseries are still going through a period of transition and they definitely need more support.”

A Department for Education spokesperson said:

“There were 75,300 childcare providers registered with Ofsted on 31 August 2020, up by 300 since 31 March 2020, and the number of early years places has remained broadly stable since August 2015.

“Standards remain high, with 96% of childcare providers rated good or outstanding by Ofsted. It’s testament to the dedication and hard work of early years professionals, which we have seen during this period of uncertainty.

“Throughout the pandemic we have protected the sector with significant financial and business support and we have increased the hourly funding rates paid to councils for the delivery of high quality, free childcare places.”