One in three nurseries in the most disadvantaged areas of England could be forced out of business due to financial difficulties aggravated by the coronavirus lockdown, a report by the Sutton Trust has found.
The trust, an educational charity, warned that permanent closure of early-years education providers would be hugely damaging for young children from poorer families, and urged the government to spend £88m to protect the sector in line with the support for schools.
Many early-years providers were already facing financial problems before the pandemic struck and have relied on emergency government support to stay afloat.
The report said many providers are unsure whether or not they can continue to operate next year. Those in deprived areas appear particularly vulnerable.
According to the Sutton Trust, 34% of the nurseries in the most deprived areas said they are unlikely to be still running next year, compared with 24% of those in the least deprived areas. Seven in 10 (69%) said they expect to be operating at a loss over the next six months, while 42% said they may have to make redundancies, compared with 31% in all settings.
“Losing access to high-quality early education is likely to have serious effects on all children, but particularly on those from disadvantaged backgrounds, widening already existing school readiness gaps,” the report said.
Potential instability in the sector coincides with concern among parents about the impact of the Covid-19 lockdown on children who have been unable to access early-years provision. The impact is likely to be particularly acute on those from disadvantaged backgrounds.
In a YouGov poll of 600 parents of children aged two to four, 45% of the respondents said they felt their child’s social and emotional development and wellbeing had suffered because of the lockdown.
The Sutton Trust is calling on the government to provide transition funding to protect early-years providers in the next few months while they struggle to reach full capacity, and to provide a one-off boost to early-years pupil premium funding for the next year to support nurseries and pre-schools, especially in deprived areas.
Sir Peter Lampl, founder and chairman of the Sutton Trust, said: “Now is the time, when the world has been turned upside down, to prioritise support for children and families. Crucially the government must introduce a package of support to protect early-years providers and enable them to stay solvent.”
The Sutton Trust report echoed a report by the National Day Nurseries Association, which found 71% of nurseries anticipated running at a loss in the coming months.
The association’s chief executive, Purnima Tanuku, said: “Research shows that children in disadvantaged areas benefit the most from high-quality early-years education. Providers need to be sustainable so this is available to children in these areas.”
Tulip Siddiq, the shadow minister for children and early years, called for urgent support to help early-years providers cope with reduced demand and extra safety costs. “The impact of mass nursery closures on working families and the life chances of disadvantaged children is too awful to contemplate.”
A Department for Education spokesperson said the government was providing significant financial support to protect childcare providers – including through the coronavirus job retention scheme – and had continued early-years funding to councils, worth a planned £3.6bn in 2020-21.
“We are investing in early-years organisations to help them boost disadvantaged children’s development, with grants targeted at improving outcomes for young children at risk of falling behind by age five, and for those with special educational needs.”