Two thirds of London’s nurseries risk closure within the year

• New report shows 64 per cent of nurseries and 56 per cent of childminders consider their services to be at immediate risk of closure or to be facing potential closure in the next 12 months
• 70 per cent of nurseries in disadvantaged areas of London class themselves as ‘struggling’ compared with 59 per cent in more affluent areas
• Available childcare will be essential to help parents return to their workplaces and drive our economic recovery

Childcare providers across the capital will struggle to survive the year, with those in deprived areas being at the greatest disadvantage according to a new report commissioned by the Mayor of London, Sadiq Khan.

With the Coronavirus pandemic impacting on the already-fragile finances of many childcare settings, the Mayor is calling on Ministers to address a funding shortfall that has driven many of London’s more than 10,000 early years providers to the brink of closure.

The providers are an essential service to support working parents so will play an important role in supporting the capital’s economic recovery, but chronic underfunding, combined with the coronavirus crisis, has had a significant impact on the sector.

The research – conducted by Early Years Alliance and Ceeda on behalf of City Hall and examining data from the end of the first lockdown to November – found that 64 per cent of nurseries, pre-schools, maintained nursery schools and 56 per cent of childminders indicated that they were at immediate risk of closure or potential closure in the next 12 months. A total of 70 per cent of nurseries, pre-schools, maintained nursery schools in disadvantaged areas of London classed themselves as ‘struggling’ compared with 59 per cent in more affluent areas.

A significant reason for these challenges was inadequate funding levels, which were made worse by the impact of Covid-19. The first nationwide lockdown saw a temporary rapid closure of childcare settings in London, with those that remained open facing significant overheads as well as substantial reductions in income.

The Mayor has provided support to the early years sector throughout his Mayoralty, raising awareness and encouraging take-up of free early education for two-year olds, funding the opening of Early Years Hubs in some of London’s most deprived areas and launching Healthy Early Years initiatives across the city. Sadiq has also written to the Chancellor and the Secretary of State for Education calling for this vital sector to receive adequate funding and recently provided business support through the London Businesses Hub.

The Mayor of London, Sadiq Khan, said: “I want to thank everyone working in the early years sector for the extraordinary dedication and resilience they have shown this past year. The early years of a child’s life are crucial to their future development and this childcare is absolutely essential to support working parents, but this research exposes the extent of the crisis the sector faces in our capital.

“We know that working mothers are being disproportionately impacted by the pandemic and are more likely to have lost their jobs – the result of structural inequality that has long existed. That is why I am calling on the Government to do everything in its power to support these key services, which are vital to London’s economic recovery, a lifeline for many of London’s working families, and a fundamental part of our duty of care to London’s children.

“The coronavirus pandemic has highlighted huge inequalities in our society and it is unacceptable that years of Government underinvestment in the early years mean children and parents from the most deprived parts of our city are now at increased risk of being left behind.”

Neil Leitch, Early Years Alliance chief executive, said: "It is deeply concerning to see that, despite the crucial role that nurseries, pre-schools and childminders in London have played supporting local children and families throughout the pandemic, an ongoing lack of adequate government support - combined with years of underfunding - means the majority will struggle to survive the next 12 months. What's more, given that we know early education is crucial to ensuring that all children are given the best possible start in life, it is particularly worrying that providers in more disadvantaged areas are at a significantly higher risk of experiencing financial difficulties than those in more affluent areas.

"With the effects of the Covid-19 outbreak likely to be felt for some time, action is needed now to protect the sector. We urge the government to heed the findings of this important report and ensure that all providers, including those providing vital care and education in the Capital, are given the support they need to remain viable throughout the pandemic, but also in the years to come.

"We look forward to supporting the Mayor’s office in its continued efforts to ensure this happens, and to build and maintain a strong, high quality early years sector in London."

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA), said: “The last year has been a particularly challenging time for early years providers, so the findings in the Mayor of London’s report although shocking are sadly not surprising. Our own recent research with private and voluntary nurseries across the country revealed that 58% were worried about surviving as businesses until Easter.

“We have been lobbying the Department for Education and the Treasury to provide urgent financial support for these early years providers who are suffering from low attendance and higher operating costs. The Chancellor must take the opportunity of the Budget to outline targeted support to save these nurseries and help them to recover so they can continue nurturing our youngest children and enabling parents to work.

“Our research over the last few years into nursery closures shows that those in areas of disadvantage are more likely to close their doors, which echoes the Mayor’s findings. And yet it is children in these areas who would most benefit from high quality early education, to give them their best chances in life and reduce the attainment gap. Levelling up opportunity starts at the earliest age. The Government must put children first, making sure nurseries can thrive and continue their excellent work in giving all children a promising future.”