According to a survey, seven in 10 nurseries and preschools in England will have no choice but to increase their fees without additional government financial support to cope with rising energy costs.
The sector warns that the energy crisis could be “a nail in the coffin” for many contexts, with more than one in 10 saying they will be forced to close permanently without an extension of the government’s energy bill relief programme.
A six-month energy price cap for businesses has been in place since early October to help industries manage rising gas and electricity costs, with a separate six-month cap for households, but both are due to end in March 2023.
The Early Years Alliance, which carried out the survey of its members, is calling for the sector to be included in the government’s list of “vulnerable” industries that should receive support beyond the initial six-month period.
The survey, which drew 1,265 responses, found that nearly seven in 10 nurseries and kindergartens (68%) and three in five childminders (61%) are likely to raise fees for parents over the next next year if government financial support ends in March. . In addition, 11% of crèches and preschools and 6% of childminders warned that they risked closing their doors permanently.
It revealed that early childhood settings were already feeling the effects of rising costs, prompting more than three in five nurseries and preschools (62%) and eight in 10 childminders (81%) to reduce their consumption of energy by reducing heating or lighting, or by preparing cold rather than hot dishes.
Almost half (48%) of childminders and around two-thirds (65%) of nursery schools and nurseries have had to increase prices to cover energy costs, while others have reduced opening hours (8 %) or reduced staff (22%) to reduce costs.
One respondent said: ‘This sector is already woefully underfunded, so energy increases have added to our financial concerns. We don’t want to increase our fees because our parents are already struggling with the daily cost of living.
Another said: ‘I have asked parents to leave a thick jumper and trousers here if needed’, while a third said: ‘Many crèches have closed and were already under pressure – this will cause further closures, dropping families in areas that likely need childcare the most.
Earlier this week, Ofsted data showed the number of childcare providers fell by 5,400 in the year to the end of August 2022, with closures in 110 authorities local. This came as childcare continued to climb the political agenda, with parents worrying about cost and availability, and the sector complaining about underfunding.
Neil Leitch, Chief Executive of Early Years Alliance, said: “We are only at the start of the winter months and already nurseries, preschools and childminders have been forced to reduce energy consumption, cut costs and increase fees just to keep their doors open.
“We know that even before the current crisis, many metrics were hanging by a thread as they struggled with years of underfunding.
“There is no doubt that unless additional action is taken, rising gas and electric costs could be a nail in the coffin for many other high quality environments across the country.”
A government spokesperson said more than £20billion had been spent over the past five years to support families with childcare costs. “We know that many households and childcare providers are facing the pressures of recession and high inflation. Improving the cost, choice and availability of quality child care for working parents is important to this government.
In an apparent reference to proposals to loosen childcare ratios, the spokesperson added: ‘We are investing millions in better training for staff working with pre-school children and have set out plans to help providers in England run their businesses more flexibly.”