Responding to a request from the Fawcett Society, Frontier has estimated the scale of the losses experienced by the childcare sector during the Covid lockdown restrictions.

The pandemic exacerbated the financial challenges within the sector with many providers likely to have felt financial losses as a result of the 10 week lockdown. Our analysis looked at private providers, childminders, voluntary providers, nursery classes and Maintained Nursery Schools (MNS).

Some of our key findings include:

• Under the scenario that there were no parent-paid fees during lockdown, it is estimated that 71% of settings suffered financial losses during the lockdown with a weekly loss to the sector of £23 million. This amounts to around 13% of total income for the sector.
• Under an alternative scenario that parent paid fees dropped to 15% of the pre-lockdown level, 67% of settings are estimated to have suffered financial losses during the lockdown, with a weekly loss to the sector of £19 million. This amounts to around 10% of total income for the sector.
• If the no fee scenario were applied to the entire 10 weeks of the lockdown, the estimated total loss to the sector across lockdown would be £228 million. If the 15% fee scenario were similarly applied, the estimated total loss to the sector would be £185 million.
• The proportion experiencing any loss was substantially lower for nursery classes than for other provider types, reflecting that nursery classes are more likely to be entirely dependent on free entitlement funding and were therefore largely protected from losses in parent-paid fees.
• Childminders have been hardest hit with 29% of income lost, while nursery classes and Maintained Nursery Schools (MNS) having the lowest losses

This latest analysis builds on recent work undertaken by Frontier Senior Associate Dr Gillian Paull with a team of researchers from the Institute for Fiscal Studies, the University of Birmingham, Coram Family and Childcare and the University of Surrey. Their report analysed how childcare providers’ finances might have been affected by the lockdown, and how they may look in the future.

To read the full analysis for the Fawcett Society, please click the link below.

For more information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000