‘We’re heading for a crisis’: UK parents face rising fees as nursery costs soar
Parents already feeling the squeeze from higher food and energy bills could soon be facing higher childcare costs as nurseries struggle to stay open amid their own surging energy bills and higher staff costs.
Research by the National Day Nurseries Association (NDNA) found that 95% of nurseries in England did not have enough funding to cover their basic costs after the impact of the Covid-19 pandemic on their incomes, while 85% said they would run at a loss or break even this year.
In April, nursery finances will be squeezed even further by a 6.6% rise in the national living wage, a 1.25-percentage-point rise in national insurance, and a sharp rise in the cost of heating and electricity bills.
More than 11,000 childcare places were lost during the Covid-19 pandemic, according to the NDNA, as 232 nurseries closed between April 2020 and March 2022. Separate data released by the Early Years Alliance found a fall in registered childcare providers of 2,595 in just five months between December 2020 and May 2021.
Government funding for help covering childcare costs for eligible two- to four-year-olds will rise in April, but at less than the rate of inflation. According to providers, it falls far below what is needed to keep nurseries running.
Emma White is the owner of two private nurseries in Suffolk: Small World Kindergarten in Ipswich and Woodlands Nursery in Kersey Mill near Hadleigh. She said she might have to raise fees in the coming months to cover increasing costs or face closure in the future.
While funding is going up by 4%, roughly £6,000 a year across the two nurseries, her annual wage bill is going up by £15,000 from April.
“Most of our staff are on minimum wage or above. And these payment increases are so well deserved –
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