Wales: Majority of nurseries will continue to run at a loss due to uncertainty over funding and lack of demandNDNA Cymru logo

Almost a month after early years settings were able to welcome all children back, they face an uncertain future with six in ten (61%) expecting to run at a loss through the autumn term.

Findings from a snapshot survey by National Day Nurseries Association (NDNA) Cymru has revealed the stark reality of how the Covid-19 outbreak will continue to impact on nurseries across Wales.

The results showed that demand for places will not be as high as before the crisis, with nurseries planning for an average of just over half (51%) of their usual numbers of children coming back. The level of children attending settings was the number one concern for providers.

With reduced demand and increased operating costs, 61% expect to operate at a loss over the coming three months while a further 31% believe they will only be breaking even. While funding through the Coronavirus Childcare Assistance Scheme (C-CAS) was broadly viewed positively, question marks over future funding were the second highest concern for providers.

NDNA Chief Executive Purnima Tanuku OBE said: “The findings in this survey show just how important childcare providers have been in the response to the pandemic with more than half being open in some capacity for key workers and vulnerable children prior to the reopening date.

“Nurseries have to carry out a huge amount of work for them to be able to operate safely and welcome more children back. It is great to see some of the innovative ideas and solutions that have been put in place to minimise any risks to children and staff.  It is important that parents are re-assured that their children can have access to high quality learning opportunities in a safe environment.

“Nurseries and other childcare providers are facing increased costs to make these changes and looking at much lower demand than usual for the coming weeks and months. Requirements around keeping children in small consistent groups is limiting providers’ abilities to operate in the most effective way for their families and settings. We have seen a relaxation around groups for schools, and early years settings need this clarity as well.

“The C-CAS payments have clearly shown how important public funding is for parents taking up places as well as for the providers who deliver it. This underlines how important it is for future funding announcements from the Welsh Government to give clarity and some certainty for the sector.

“It is clearly not sustainable to have almost two-thirds of providers running at a loss and most of the rest only just breaking even. If this continues more settings are bound to move from making a loss into having to make the heart-breaking decision to close.

“The Welsh Government needs to act now and bring in a recovery and transformation fund to help providers weather this challenging period. This type of fund is essential to support early years’ providers to be sustainable as demand for places slowly recovers. If we want the economy to recover we need a sustainable and viable childcare sector to ensure parents can work and children can access high quality early years care and education.”

To welcome children back safely nurseries have implemented a range of new measures including comprehensive risk assessments, keeping children and staff to small groups inside settings, new infection control measures and dividing up spaces to allow children to play and learn freely within their smaller groups.

The survey also found:

  • 60% of respondents were open prior to the 22 June to offer places to key worker families and vulnerable children
  • The average occupancy across all respondents was 51% of children compared with the usual number of children for this time of year
  • Looking at current demand and operating within current guidance 61.4% of respondents expect to operate at a loss for the coming three months. A further 31.4% expect to be operating at break-even level and 4.3% believe they will have to close. Only 2.9% believe they can operate slightly above breaking even point
  • 88% of respondents said the C-CAS rate was at least the same as they would have charged parents 
  • 84.3% of providers were open for more children from 29 June with 12.9% waiting for a later date.