A challenging time for childcare providers who are delivering a critical service for children, parents and the economy
The role of quality childcare is vital both in supporting parents to access and progress in work, allowing the economy to develop and grow, and in nurturing child development. We know, however, that high quality childcare can be costly for parents to access and for providers to deliver. Our research, carried out annually since 2010, has highlighted a system where many parents struggle to afford the childcare they need AND childcare providers are struggling to be sustainable, with increased costs and overheads. This simply isn’t right and cannot continue.
While the cost of accessing childcare for families is often in the spotlight, with many paying more for childcare than their mortgage or rent, it is important to also recognise that it is costly to provide quality childcare, and providers can only continue to deliver this essential service that so many families and children rely on, where it is financially sustainable for them to do so.
Parents tell us every year about the high quality of care their children receive, and how overwhelmingly happy they are with the childcare provision they are using, referring to the developmental opportunities that are created and the strong bonds that are nurtured between children and their carers.
“Providers are excellent – it is costly but I understand the child / carer ratio requires a certain number of staff and therefore costs need to be covered.”
“My childminder was wonderful – she stayed open for key workers, I’d have been lost without her – they deserve a medal for what they have done.”
Childcare professionals are children’s first educators and children who benefit from high quality childcare start school, on average, three months ahead in literacy and numeracy, with the benefits also having been shown to last right through children’s primary and secondary education.
For childcare providers, and for the staff working in the sector, this has been a very challenging year. Many providers had no option but to close for some or all of the initial months of Covid-19, and some have continued to experience a decline in occupancy and temporary closures since then. Covid-19 recovery and sustainability funding from the Department of Education has provided a lifeline for many but, longer term, strategic support and an ambitious Childcare Strategy is urgently needed.
Pre-existing challenges for the sector
While Covid-19 may have exacerbated the challenges experienced by the childcare sector, it did not create them. Last year, the 11th Northern Ireland Childcare Survey revealed that a significant proportion – 72% – of providers reported they were either just breaking even or making a loss. Many registered childminders, and childcare staff working across the sector, are reliant on support through Tax Credits or Universal Credit to help them manage on lower incomes, and concerningly – looking ahead, 42% of providers anticipated that their economic situation would worsen over the next year. Importantly, the survey for childcare providers was carried out before the Covid-19 pandemic and does not reflect the further challenges that this has brought for the sector.
The majority of providers (73%) had kept their fees to parents the same in the previous year, with a quarter having increased fees. Where there was an increase, the key reasons for this were:
- Increasing staff costs and pension obligations
- Increasing costs of food, material and equipment
- Business rates and insurance
- Rent or mortgage.
Providers who completed the survey told us:
“It is always a concern when fee increase is passed on to parents, we have avoided doing this for 3 years but with the increase in staff wages and pension contributions etc we have no other option.”
“Ratios in Northern Ireland are much stricter than England – this has a massive impact on business costs and staffing.“
“Unable to pay the very loyal staff the wages they deserve due to extremely low profit margins.”
“Lower the ratios – therefore staff costs reduce and staff wages can be increased, therefore rewarding staff and retaining good staff.”
“Minimum wage increase adds thousands to our wage bill that we can’t cover without raising costs – alongside increasing running costs, we are at risk of closing services.”
Impact of Covid-19
We know that many providers have felt the impact of Covid-19, with increased costs – due to enhanced cleaning regimes, infection prevention and control measures, increased staff hours to manage the ‘bubble’ system, Covid-19 related staff absences. They have also faced recruitment and retention challenges, and temporary periods of closure – as well as a decrease in income due to reduced occupancy levels, and ongoing uncertainty as to what occupancy levels will be going forward.
Earlier this year, childcare providers from different parts of Northern Ireland – representing a day nursery, school age childcare provider, and registered childminders – shared the challenges they were experiencing directly with the All Party Group on Early Education and Childcare.
The providers outlined the additional costs they have faced, how they have had to adapt quickly to new and changing Government guidance to ensure their setting is a safe environment for children and staff, and in some cases support children through ‘home schooling’ due to restrictions in place across the year. Children’s well-being and development remained a top priority throughout. As well as the financial toll, the providers also shared how their mental and physical health was impacted and the well-being of staff working in the sector during this unprecedented time. At a time when the vast majority of people were told to ‘stay home and stay safe’ childminders were opening their homes to the children of key workers and vulnerable children, and other childcare professionals were going to work in group settings to also provide essential care for these children.
What needs to happen next?
It is without doubt that the Covid-19 pandemic has increased the strain on a childcare sector that was already struggling. Significant investment and a long-awaited Childcare Strategy – which was committed to within the New Decade, New Approach agreement is urgently needed. Financial support provided through the Covid-19 Childcare Support Fund, has been welcomed across the sector, and provided a lifeline for many, at a time of great need. However, to truly ‘build back better’ from the experiences of Covid-19, we cannot simply go back to how things were pre-pandemic, when childcare providers were already struggling. Otherwise, we risk a collapse in the supply of quality childcare and a further increase in costs for parents. This, in turn could lead to:
- Parents unable to afford childcare, and having to reduce their hours at work or leave work altogether
- Our overall economic and societal recovery from Covid-19 being held back
- An increase in levels of household and child poverty
- Prolonged negative impact on the social and educational development of our children.
In the words of one parent in our research
“Covid-19 has brought into very sharp focus just how much we rely on those who look after our children and the massive benefit they have provided to them. The relationships between children and carers are so important and it was lovely to see the happiness at being back together. Aside from the fact that childcare allows us to work without worrying about children, the educational / social / emotional support they provide for our children is invaluable.”
Childcare is an essential part of our economic infrastructure and, as we seek to recover from Covid-19, we are calling for strategic, long-term investment in the childcare sector in Northern Ireland. This must be underpinned by an ambitious Childcare Strategy that delivers for parents and children, childcare providers and the childcare workforce, as well as our economy and society as a whole. This is an opportunity that cannot and should not be missed – too many generations of children and their parents have been denied the support that they have been telling us for many years they need. Our Executive must take action on this now – we can’t afford to delay any longer.
We will be using the 12th Northern Ireland Childcare Survey – which will open for responses very soon – to understand the experiences of the childcare sector and parents at present, more than one year on since the pandemic begun and to inform our ongoing work with Government departments and the All Party Group on Early Education and Childcare.
Ensuring you are accessing all of the support that is available
In the meantime, we would encourage all providers to apply for financial support available through the Covid-19 Childcare Support Fund including the Sustainability Fund (closes 16 August 2021) and the Covid-19 Temporary Closure Fund (closes 14 October 2021).
For more information, or for advice and guidance on what support is available to you, your staff or the parents using your service get in touch with our Family Benefits Advice Service on Freephone 0800 028 3008 or email email@example.com.