‘I’ve never been so low’: the childcare providers facing closure over rising costs

theguardian.com:

Claire Kenyon prides herself on offering “flexible, affordable, play-centred” childcare at her Chichester nursery, but fears she may soon be forced to close her doors.

Busy Lizzie’s, which sits on a council estate and serves mostly deprived families, is now racking up losses of about £11,000 per year.

Only 12 out of its 52 children pay fees, with the rest funded solely by the government’s “free” term-time childcare offer: either 15 hours per week for all three- and four-year-olds in England, or 30 hours for working parents of children in this age group. The nursery loses £1.50 an hour for each funded child.

“The biggest issue for us is the huge jumps in minimum wage over the past few years,” says Kenyon, 36, the nursery’s manager and co-owner.

Soaring energy bills, driven by Russia’s invasion of Ukraine, have compounded matters. The government is due to announce the details of a bailout package for businesses on Wednesday, part of Liz Truss’s £150bn support scheme to cap energy bills, and it cannot come soon enough.

“Every time the minimum wage goes up, so do our outgoings, because the government funding doesn’t match these wage rises.”

While many other nurseries have reacted to the wages bill by charging for extras such as lunch or activities, Kenyon says this is not an option, as children of low-income parents would stay at home.

Without significant state support of the kind promised by Truss, she cannot predict how long she will be able to keep going.

“We’ll simply have to close,” Kenyon says. “We already operate with the help of a very expensive short term loan, to pay staff.”

​​This summer, Ofsted data showed that between 1 April 2021 and 31 March 2022 there was a net overall decrease of 4,000 childcare providers in England,