Nurseries and childcare providers are one of three sectors, including weddings and private events and holiday accommodation, identified for immediate investigation by the Competition and Markets Authority (CMA).
Its Covid-19 Taskforce – set up to monitor market developments and identify problems during the pandemic – has seen increasing numbers of complaints about childcare settings relating to fee cancellations and refunds.
CMA says it will tackle these areas as a priority and then move on to examine other sectors, based on the information received by the taskforce.
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But at the Early Years Alliance, chief executive Neil Leitch flags up that any instances of settings taking an unreasonable approach to parental fees would be likely to represent a tiny minority of the sector as a whole.
He said: ‘What's more, it is important that the CMA takes into account the fact that, unlike the holiday and wedding industries, the childcare sector is heavily dependent on government funding, and this funding has been inadequate for years. This has put a huge pressure on providers trying to remain sustainable, and especially during this incredibly challenging period.
‘It is vital that any review of childcare practices takes these factors into consideration, and the Alliance would be very happy to support the CMA to gain a full and comprehensive understanding of these issues to ensure that the upcoming investigation is balanced and well-informed.’
At the National Day Nurseries Association, chief executive Purnima Tanuku said: ‘Nurseries are being put between a rock and a hard place during this crisis. They are being asked to remain open and run at a loss to provide emergency childcare, while those who can’t open still face staffing and other costs which the Governments support doesn’t fully cover.
‘As a result of a lack of insurance cover, delays to Government support schemes and chronic underfunding of childcare places we know that some nurseries have asked parents for contributions to keep their businesses afloat.
‘If nurseries don’t have the income to cover their ongoing costs then they won’t be able to re-open when parents come to going back to work. If these measures – combined with a lack of Government support – force more nursery closures it will be the families and children who will suffer in the long term.’