Parents in the UK may soon face higher childcare costs as nurseries struggle to stay open amid surging energy bills and staff costs. Research by the National Day Nurseries Association (NDNA) found that 95% of nurseries in England do not have enough funding to cover basic costs after the impact of the Covid-19 pandemic, while 85% said they would run at a loss or break even this year.
In April, nursery finances will be squeezed further by a 6.6% rise in the national living wage, a 1.25-percentage-point increase in national insurance, and a sharp rise in heating and electricity bills. More than 11,000 childcare places were lost during the pandemic, according to the NDNA, as 232 nurseries closed between April 2020 and March 2022.
Emma White, owner of two private nurseries in Suffolk, said she may have to raise fees to cover increasing costs. While government funding for eligible two- to four-year-olds will rise by 4% in April, her annual wage bill is increasing by £15,000. “Most of our staff are on minimum wage or above… What makes it difficult for us is that they are not being mirrored in the amount the government give us,” she said.
Other costs include higher heating bills due to ventilation requirements for Covid-19, and rising interest rates on loans taken to cover pandemic losses. White recently cut a management role to balance the books but said fee increases are inevitable. “Ultimately, it will become unaffordable for parents to go back to work,” she warned.
Early years practitioners like Kelly Barclay, who works at a nursery in County Durham, are also struggling. Despite holding a degree, she is looking for a second job to cope with rising living costs. “We are on the national living wage… once my bills come out, I am in my overdraft again,” she said, adding that the wage does not reflect the importance of their work.
