Home National childcare survey reveals that 40% of childcare providers don’t expect to make a profit this year

National childcare survey reveals that 40% of childcare providers don’t expect to make a profit this year

Press Release: September 28, 2015

Over the past few months, Parenta have been collecting responses to an online survey which has provided a crucial insight into the issues affecting the Early Years sector.

Childcare providers already face many challenges in running their businesses, including the chronic underfunding from Free Entitlement which means they are losing £800 per year for 3-4 year olds and £700 per year for 2 year olds.

The survey, which covered how providers thought they were performing in five key areas, revealed that 2 out of 5 providers didn’t think they were on track to make a profit at the end of the year.

Parenta also discovered that nearly two thirds (63%) are struggling to recruit high quality and well- qualified members of staff. This could be blamed on the stipulation that new apprentices and level 3 childcare students must have GCSE English and maths at least grade C, which had become a barrier for many learners advancing their career in the sector.

In a more recent change, standalone courses (non-apprenticeships) for those aged 19 and over were brought in line with Level 3 apprenticeships, for which the GCSE entry requirement was amended.

Alarmingly, more than half of respondents (54%) to the survey revealed they had to write off bad debts in the past 12 months, with one provider stating this amounted to a staggering £12,000.

Parenta found that, on average, childcare providers increased their fees once every 16 months. When asked “If you offer free entitlement, how much are you losing per hour per child?”, the majority of respondents (28%) said they were making a loss in the region of £1.01-£2.00.

With the introduction of 30 hours free childcare on the horizon, this funding deficit is likely to worsen and childcare providers will either need to push up fees for unfunded hours or for children below the entitlement age.

Although Parenta’s survey has highlighted that the majority of providers are able to run profitable businesses, there is increasing pressure on frontline staff to manage their time, resources and funding carefully to ensure they are able to run a sustainable service in the future.

Other findings include:

- Nearly 1 in 4 providers (24%) admitted they were often chased by people they owed money to
-The most common age group free entitlement was offered to was 3 year olds (89%)
-Nearly a third of providers (32%) said they had lost more than 10% of their staff in the past year
- The average occupancy rate was 80.24%

Find out more at www.parenta.com

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