Despite financial challenges half of UK nurseries have stayed open for critical workers
Thursday, April 9, 2020
Latest research from the National Day Nurseries Association (NDNA) flags up the extent of the cashflow issues facing nurseries – whether they have remained open for fewer children or have closed their doors with ongoing overheads.
Half of UK nurseries are currently battling a dire financial situation in order to stay open for the children of critical workers, while others are having to ask parents for the full cost of a place, despite being closed.
NDNA’s survey highlights that those nurseries which have remained open would normally be educating and caring for almost 140,000 children but are now looking after 16,236 children, which is about 12 per cent in total.
While seventy per cent of nurseries are not charging parents any fees for children who are unable to take up their place over the coming weeks, 17.5 per cent are having to charge parents or ask for voluntary contributions of up to 25 per cent so they can pay their overheads.
This could be because funded childcare payments only cover a fraction of their costs and cash flow issues are caused by a delay in Government support schemes. Many nurseries will have fixed costs such as rent, mortgages and utilities and a lack of insurance coverage for Covid-19.
Where providers are struggling to remain viable, they are asking parents to pay more than half (1.5 per cent) and 1.9 per cent are asking parents for the full amount to be sure that they could reopen in the future.
- Threat posed by unregulated providers
- Government strengthens advice around social distancing in settings
- 1309 separate responses representing 2570 nurseries
- 50 per cent of those who responded said they were currently open
- These nurseries currently look after 16,236 children, which is 12 per cent of those they usually care for
- Nurseries in the UK on average receive only 38 per cent of their income from government funding, however 70 per cent have said they are not charging parents for children’s places which they are unable to take up
- 17.5 per cent are charging parents up to 25 per cent of their normal fees; 9 per cent are asking for 26 – 50 per cent
- 1.5 per cent said they were charging parents between 51 and 75 per cent and 1.9 per cent were charging more than that
The responses came across nearly all local authority areas in England, Wales and Scotland
Plea for more Government support
NDNA Chief Executive, Purnima Tanuku OBE said: ‘Our new research illustrates how difficult life is for our nurseries in the UK as they try to help the national response to Covid-19.
‘Different UK governments have pledged to maintain support through the usual funding for childcare places but our survey shows that this only makes up 38 per cent of their regular income on average. It does vary widely from nursery to nursery with some relying completely on parental fees. All nurseries still have fixed overheads even with a fraction of their usual income.
‘NDNA is lobbying all three governments hard for more support for these nurseries without which many critical workers on the frontline such as NHS staff would not be able to carry out their essential work.
‘Even with putting some staff on the Job Retention Scheme, many will struggle to keep their nursery businesses afloat. The Government support does not cover the running costs of those who are staying open and won’t cover all fixed costs for those who close. We know of nurseries that are running at a loss of hundreds of pounds per day to stay open for families who need them. But they won’t be able to sustain this for long.
‘Employers are facing cash flow issues now but we know funds like the Job Retention Scheme won’t be accessible until the end of April at the earliest.This is why some nurseries are having to approach parents to help keep them in business.
‘It’s time the Government acknowledged this and put their backing behind nurseries to make sure they are in a position to fully re-open when the country gets back to business as usual. Nurseries need to be able to access more support from Government such as the £10,000 small business grant and the £25,000 retail business grant.’