Low pay, a high workload and a lack of career development for early years workers risk having a serious impact on the provision of care and education services for the under-fives, says the Social Mobility Commission in its report, The stability of the early years workforce.

There are signs that the workforce – which includes childminders, nursery assistants and early years teachers – is becoming increasingly unstable with too few new entrants replacing those leaving the sector.

High turnover can affect both the quality of service and children’s outcomes, and a stable workforce is even more important in disadvantaged communities. By the time children are aged 5, those from disadvantaged families are already significantly behind their wealthier peers in a variety of development measures.

Social Mobility Commission

A cappuccino and a muffin combo valued higher than the proper care of a child for one hour

The report fundings found that as many as one in 8 of the early years workforce is paid under £5.00 an hour. That means a cappuccino and muffin combo is valued higher than the cost to properly care and educate a young child for one hour.

The average wage is only £7.42 an hour, less than the minimum wage and much lower than for the average female workforce (£11.37). The research finds that staff turnover is high, at 15%, mainly due to low pay, a lack of training and career structure and excessive overtime.

According to the report, childcare professionals work longer hours than people in comparable occupations: 11% of full-time early years workers reported working more than 42 hours per week, compared to 3% of retail workers and 6% of female workers in general. There are few training opportunities once people enter the workforce. Only 17 % of early years workers receive job-related training. While a high proportion of workers are passionate about what they do, 37% leave their employer within 2 years.

COVID-19 effect

The coronavirus (COVID-19) outbreak has caused considerable disruption to childcare providers since lockdown started in mid-March, generating financial instability for many workers. As parents start returning to the workplace, the early years workforce will become even more vital for child development and cannot be overlooked. There is now a real risk that persistent disruption and lack of support for workers could affect the quality of early years provision.

Self-employed impacted

The 280,000 strong early years workforce – mainly young and female – provide education and care to children from birth to aged 5. They can be self-employed, such as childminders, or work in a formal nursery. Nurseries may be part of a school or children’s centre or be independent of either. But most are run by organisations in the private, voluntary and independent (PVI) sectors.

HomePublicationsChallenges for the childcare market: the implications of COVID-19 for childcare providers in England

Challenges for the childcare market: the implications of COVID-19 for childcare providers in England

Jo Blanden, Claire Crawford, Elaine Drayton, Christine Farquharson, Megan Jarvie and Gillian PaullReport04 Sep 2020Share  

The closures of childcare providers to most families during the COVID-19 crisis have underlined the importance of access to childcare, both to support paid work and to help shape young children’s environment. However, the crisis has had severe consequences for the finances of childcare providers, which were already weak in several parts of the sector going into the crisis. Despite a range of government support programmes, many providers lost income during lockdown. In the medium term, a longer-lasting fall in demand for childcare or an increase in costs related to social distancing could seriously hamper financial sustainability in the sector going forward.

In this report, we assess the consequences of the pandemic – and the resulting public health response – for the finances of early years childcare providers. The pandemic has hit demand for childcare hard: during the lockdown, when only vulnerable children and those with key worker parents were able to access childcare, fewer than 250,000 children aged 0 to 4 were attending childcare on a given day, compared to around 1.4 million before the pandemic. Since June, the sector has been allowed to serve all children in England, but even before the summer holidays, take-up peaked at 420,000 children.

We summarise the packages of support available to providers to help them cope with the loss of demand during the lockdown and over the next few months, and we model how these have interacted with the loss of income due to the crisis and with providers’ pre-existing finances. We also discuss how the changes to providers’ finances might affect capacity in the sector, and whether and how the government might intervene to support providers.

We find, unsurprisingly, that lockdown is likely to have damaged the financial health of many childcare providers, even after accounting for major government support programmes. Assuming that providers were not able to take in any income from parent fees, we estimate that a quarter of private-sector nurseries might have run a significant deficit during the lockdown (with at least £5 of costs for every £4 of income). Even if providers did manage to retain 15% of their normal fee income, either through retainers or by providing childcare to eligible families during lockdown, we still estimate that one in five are likely to have run a significant deficit during lockdown.

Of course, these figures reflect not just the pandemic, but also the pre-existing weakness in some providers’ finances. Even before the pandemic, 11% of private-sector providers were running a significant deficit; this could have been an unusual (and temporary) state of affairs, or a prelude to exiting the marketplace.

According to an IFS report, childminders, who are mostly self-employed, have been badly hit by the crisis.

“Even if all childminders received self-employment grants, the total loss of parent fees could see an additional almost 30% of childminders now earning less than £4 of income for every £5 of costs (counting what they usually pay themselves in the costs). In practice, many childminders will see their earnings take a hit, which could jeopardise their ability or desire to stay in the market,” said the IFS report.

Over the next six to 12 months, the IFS suggests that the key question for the sector will be how much demand for childcare recovers, and how quickly it returns, as government support is phased out.

“We have no special insight into this: it will depend on the paths that the economy and employment take, as well as the wider health concerns of parents,” says the report.

However, the IFS says that over a range of scenarios that they have modelled, they estimate that, compared to the pre-crisis baseline, each 5 percentage point fall in income from parent fees and charges might see another 3% or 4% of providers tip into significant deficit if they do not make adjustments to their business, such as reducing the number of staff.

Regardless if working families go back to the office or work from home or run their own business, they will need reliable childcare to keep the economy ticking should their children not be nursery school or school age. There is also any potential COVID local lockdowns to emerge as we have witnessed in Birmingham.

Barriers to stability

The research, carried out for the Commission by the Education Policy Institute (EPI), and based on analysis and qualitative work, found that the main barriers to a stable workforce in childcare are:

• low income
• high workload and responsibilities
• over-reliance on female practitioners
• insufficient training and career opportunities
• low status and reputation
• a negative culture and climate within the organisation

Steven Cooper, Interim co-chair of the Social Mobility Commission says the early years workforce is vital in helping to narrow the development gaps between children from disadvantaged backgrounds and those from more privileged backgrounds.

“We must do everything we can to ensure that childminders and nursery workers are valued more by ensuring we pay them a decent wage, give them a proper career structure and ensure their workload is reasonable.”

Steven Cooper, Interim co-chair of the Social Mobility Commission

The findings

• In England, the average wage across the early years workforce is £7.42 an hour. This compares to £11.37 for the female workforce and £12.57 for the total population.
• 13% of the workforce earns less than £5.00 an hour.
• Many childcare workers take on second jobs to make ends meet.
• 11% of full-time early years staff work more than 42 hours per week, compared with 3% of retail workers and 6% of the female workforce.
• One in 6 workers (15%) leave their jobs within a year.
• The workforce is mainly young and female: 40% are below 30 and 96% are female.
• Workers at private daycare nurseries said their duties involved heavy cleaning including washing windows and mopping floors.
• Stability varies across regions:31% of early years workers in the North of England stay with their current employer for less than 2 years, compared to 37% in the Midlands and 40% in the south of England.
• Employers say they lack the funds to provide training for their workforce. A 2019 survey found only 8% of early years providers planned to spend more money on training and 55% planned to spend less.

The Commission will be pressing the government and employers to take urgent steps to improve the stability of childcare provision in these critical years.

The Commission proposes a comprehensive career strategy for the early years workforce including attracting older workers into the profession. It also calls on the government to match the operational costs of providing childcare to take account of increases in inflation and the national minimum wage.

If you are interested in becoming a childminder, PACEY, the Professional Association for Childcare and Early Years is a good place to start for information.