Nearly 25% of UK Nurseries Could Close in 12 Months. What is the Childcare Crisis and How Might It Affect UK Entrepreneurs?

At the age of 17, I gave birth to my first son and a year later I was involved in running my first business, a newsagents, which required starting work at 4am each morning, seven days a week and this after many sleepless nights.

Those who have done it, know that launching a business can be the one of most exhilarating things you can do. There is no-one to tell you what to do, what actions to take, or how hard to work. By the same token, there are more demands on your time to achieve deadlines and fulfil orders.

Many women (and men) who are starting out and building businesses depend on childcare, but quality childcare can sometimes be out of reach.

One of the most significant changes in the years since I had my children, was in 2017 when the Government doubled the number of hours of free childcare that working families with three and four year olds are entitled to. This jumped from 15 to 30 hours per week.

Even though the Government now spends £6 billion on childcare support, childcare in the UK, is in a perilous position.

The latest data from Ofsted (2020) indicates that almost a quarter of the 75,336 registered nurseries are expected to close over the next 12 months, that’s a potential 20,000 businesses.

It is useful to remember that only a small number of nurseries are part of chains. The impact of expected rise in unemployment and the growth of part-time work means that nurseries have been running at well below capacity. At 71% capacity, most nurseries will lose money.

A recent survey by the Childcare online platform found that one in every six providers are likely to close permanently because of the impact of the pandemic. One in three were unsure if they could reopen.

As we know the Prime Minister recently announced schools and early learning settings can go back on March 8^th but with social distancing still required, some nurseries will be unable to take as many children as they could previously, which means less revenue. Of course parents have already withdrawn children from nursery after losing business or because they are working fewer hours.

There is the possibility women especially might be trapped in a pincer movement: you lose your job but have a bright business idea then your local nursery closes and either another is out of your area or is too costly, so your business idea is ditched and you remain at home to look after your children.

In Europe on average a family pays 13% of its income on childcare. In Britain, the childcare burden rises to 27%, making it economically un-viable for a second wage-earner in the family to work or start a business. We are in danger of seeing too many women lost to the economy and an increase in inequality if this happens. But it’s not inevitable.

What can we do to ease this potential childcare crisis? In my last blog, I talked about my plan to launch Charter 21 (my manifesto which will help entrepreneurs in the communities where they live) at the end of March. One element of the charter is looking at what we can do to support childcare in communities up and down the land.

The Alison Rose Review of Female Entrepreneurship in 2019, found that primary care responsibilities remain the most important barrier for many female entrepreneurs and that innovative new financial products could help. I echo that review, bold policy decisions are needed which must be designed to help parent entrepreneurs to manage their businesses and the challenges of raising a family.

Whatever the roadmap is to steer the childcare sector to recovery, reform must come from a variety of different voices in our communities, change which is centred on equity and quality, reinforcing values instead of competing priorities so we can find comprehensive short and long-term strategies.

As FSB’s Armed Forces Champion for Small Business, I read their ‘Handle with Care,’ report which looked at the challenges facing childcare providers, with great interest. I entirely agree with one of the report’s conclusions which said Government should create a new 100 per cent business rates relief for childcare providers in England – day nurseries are exempt from business rates in Wales and Scotland.

Many of you will know that I’m armed forces reservist as well the founder and CEO of X-Forces Enterprise so it’s great to hear the Government will for pay for childcare for service families during term time.

As I said at the beginning of this blog, I know from first-hand experience how challenging it is to start and continue to run a business as well as juggle the demands of family life.

It is with my background of being a mother, an entrepreneur and business owner and someone who passionately believes as many people as possible should have the opportunity of running their own business, that I’m putting myself forward to host a childcare summit later this year.

Why childcare is so costly in Britain is a mystery that urgently requires unravelling, so this summit will be a conference that will consist of representatives from across the childcare sector including Ofsted, nursery businesses and sector organisations, parents, women entrepreneurs and MPs. Together we will tackle the big issues of this potential childcare crisis, prompt debate and find solutions.

I’d like to hear from as many people as possible about the problems you’ve faced with childcare and what you think could solve this ongoing problem.

After the summit, we will write a white paper that will set out to inform government about this complex issue and hopefully present a long-lasting philosophy. Please write to me at ren.kapur@x-forces.com.