Analysis has found that low-income families are unable to take advantage of the significant increase in free nursery hours.

Experts have cautioned that lower-income families are being excluded from a significant increase in free nursery hours, following an exclusive analysis by the Guardian which shows a notable decline in the number of not-for-profit nurseries in England’s most disadvantaged regions.

According to an analysis of official data, approximately one-third of non-profit childcare centers shut down or were acquired by private businesses, including private equity firms, in the most impoverished areas of the nation between 2018 and 2022.

Special education experts caution that government-funded and non-profit childcare facilities are crucial in providing care for children with special needs and primarily serve families in the most economically disadvantaged areas of the UK.

The government’s scheduled expansion of free childcare programs, set to begin in April 2024, is preceded by warnings that experts say will not be possible without addressing the current staffing crisis.

Starting in April, working parents with two-year-old children will receive 15 hours of free childcare per week for 38 weeks, funded by taxpayers. Then, by September 2025, all parents with children under the age of five who are eligible will have access to funding for 30 hours of childcare per week for 38 weeks.

Earlier this year, professionals cautioned that the childcare industry could potentially turn into a “playground” for private equity firms as these funds have significantly increased their ownership in the sector by more than twofold in just four years.

Joeli Brearley, founder of the advocacy group Pregnant Then Screwed, stated that there are indicators that this may result in a higher number of non-profit childcare facilities shutting down, leading to disadvantaged families and those with children with special educational needs residing in areas with limited access to childcare services.

She stated that as childcare becomes a part of the welfare system and receives a significant amount of funding from taxpayers, it is crucial that the money is used to improve the quality and accessibility of childcare rather than benefitting large corporations.

The Guardian conducted a study of over 18,000 childcare providers and discovered a significant decline in the number operated by charities, local authorities, churches, and other non-profit organizations in the span of four years.

Nearly one-third, specifically 29%, of non-profit nursery facilities ceased operations or were transferred to private ownership in the most impoverished regions of England from 2018 to 2022. This resulted in a 21% decrease in available non-profit childcare spots, while the number of children under the age of five residing in these areas only decreased by 15%.

The number of non-profit nurseries in England has decreased by 23% over the span of four years, while privately-owned nurseries have seen a 10% increase.

Abby Jitendra, a policy adviser at the Joseph Rowntree Foundation, stated that overall, underprivileged children have better outcomes in non-profit or state-run nursery care facilities. However, these types of centers are becoming scarce. This is due to the government enforcing stricter regulations for non-profits compared to other types of facilities. The main focus should be ensuring that every child, regardless of location, has access to high-quality care.

According to Sir Peter Lampl, the creator and leader of the Sutton Trust, low-income households are currently unable to access assistance for childcare expenses. A study conducted by the organization revealed that only 20% of the lowest earners qualified for aid for children aged three to four, which necessitates parents to work a minimum of 16 hours per week.

He stated that childcare facilities in low-income neighborhoods were shutting down due to the inadequate hourly rate for “free” hours provided by the government, which does not cover expenses. Additionally, there is limited opportunity to compensate for this deficit by charging parents extra fees.

He stated that early childhood care should be considered as learning, not just supervision, and all young kids should be able to receive it.

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A recent research conducted by University College London revealed that the private sector, which prioritizes profits and growth and is largely characterized by intricate financial systems and high-risk operational methods, often fails to address the needs of vulnerable or disadvantaged children.

According to Dr Antonia Simon, the main writer of the report, it is crucial to have strict measures in place for companies that are funded by taxpayers’ money. This comes as the Treasury is aiming to allocate an additional £4bn every year for nursery placements.

“Is it possible for childcare services operated by for-profit companies, with the primary goal of generating profits for shareholders, to ensure equal and fair outcomes for all children?” she inquired. “It is crucial to establish strong protections for childcare companies that receive public funding, such as meeting the needs of at-risk children and having an equitable presence in both disadvantaged and non-disadvantaged areas.”

According to Purnima Tanuku, the CEO of the National Day Nurseries Association, nurseries in disadvantaged areas are at a greater risk of closure due to a larger proportion of children receiving government funding compared to those whose parents pay for their care.

The funding rate has been raised by the government, however advocates argue that it is insufficient to cover the expenses of providers.

From 2018 to 2022, there was a 10% decrease in the amount of childcare providers in the most underprivileged regions of England. During this time, there was also a 2% decrease in the number of available childcare spots. In contrast, the least underprivileged areas experienced a 4.3% decline in nurseries, but a 5% increase in available spots.

High quality early education and care plays an essential role in children’s future, especially for those living in deprived areas who are more likely to have special needs as it can “help close the attainment gap which widens during their school years,” said Tanuku.

The government announced that they will be implementing the largest investment ever made in childcare in England, according to the Department for Education.

“In order to ensure sufficient coverage throughout the country, we are currently investing large sums of money to raise hourly funding rates. Additionally, we plan to allocate £100 million in capital funding for the creation of additional early years and wrapround spaces.”


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