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20% of Nottingham city early years providers could close for good, says report

Demand has plummeted since the start of the outbreak, with fewer parents in work, more working from home, and many seeing reduced incomes.

As many as 30 per cent of early years childcare providers – such as nursery schools and childminders – could close for good in Nottingham, a new report has found.

Demand has plummeted since the start of the outbreak, with fewer parents in work, more working from home, and many seeing reduced incomes.

On top of that, extra staffing requirements and added costs for things like PPE have put many in perilous financial positions.

Now, Nottingham City Council says although nationally 20 per cent could close, the figure in the city is more likely to be 30 per cent.

But the managing director of one city nursery has said this could be an underestimate.

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In response, the city council is asking the Government to allow it to alter its budget in year, and effectively increase the amount it pays childcare providers.

A council report says: “The economic challenges currently faced by this sector in terms of long term sustainability could see a decline in the overall number of childcare providers in the city.

“For some providers, their short term forecasts do not demonstrate viable businesses.

“Nationally, it is reported that around 20 per cent of childcare businesses could close as a result of COVID-19; locally, we are concerned this could be around 30 per cent.

“Financial support packages for childcare businesses during the pandemic were limited and not accessible to all providers.

“There has been no post-COVID financial recovery support to the childcare sector announced by the Government.”

The Government says ‘significant support has been made available over the past months’.

But Tom Holmes, managing director of Stepping Stones Day Nursery, in Arboretum, said being forced to pay a percentage of the furlough costs will be the main reason some nurseries will never reopen.

He said there are several measures the Government could take, including exempting them from council tax, substantially increasing the funding rate and then agreeing to yearly increases, and allowing nurseries to claim back VAT, which would help save nurseries.

However, he said without these changes, the prediction that 30 per cent of nurseries could close “doesn’t surprise me in the slightest”.

He said: “We are very fortunate at Stepping Stones that we have a loyal customer base and with several special offers running for new customers we have seen a big increase in demand from September onward, returning to roughly 80 per cent of where we were before lockdown.

“Initially when we reopened in June we were operating at around 20 per cent of our nursery’s capacity.

“With us having ten classrooms and four outdoor areas we were fortunate to be able to ‘bubble’ our staff and children, however, I know a lot of smaller nurseries around us have really struggled due to them only having a limited amount of space.”

However, he said the council increasing the base rate ‘won’t particularly help the sector in the short term, as fewer funded children are currently accessing childcare.’

He said: “Nottingham City Council are very supportive of the early years sector and I know they’d love to pay us what we deserve, however the changes that the sector require would obviously need to come from central Government, without some of the suggestions I’ve made above I suspect 30 per cent of settings may be an underestimate.”

Cheryl Barnard is the Labour councillor for Bulwell Forest, and the city council’s portfolio holder for children and young people.

She said: “We are aware that Covid-19 has resulted in severe economic challenges for early-years providers in Nottingham. Many have been closed throughout the past few months and will be opening when the new school term starts again next week.

“The loss of income, along with the additional hygiene measures needed both to prepare for reopening and for operating safely for the foreseeable future, has had a financial impact.

“Added to this is the reality that fewer places will be taken up due to increased job losses and meeting new Government requirements for staffing ratios.

“In order to support our providers, we are increasing the hourly rate for three and four-year-olds with the cost being met from a special early-years budget.”

A Department for Education spokeswoman said: “Nurseries, childminders and pre-schools have provided crucial support throughout the pandemic and are now more vital than ever as hard-working parents return to work.

“This important sector has received significant financial support over the past months to provide stability and reassurance.

“We are continuing to provide extra security to nurseries and childminders that are open by ‘block-buying’ childcare places for the rest of this year at the level we would have funded before coronavirus – regardless of how many children are attending.

“Early years providers will benefit from a planned £3.6 billion funding in 2020-21 for free early education and childcare places. From next year we will also be investing £1 billion to create more, affordable wraparound and holiday childcare places.”

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