Department for Education

James MacCleary Excerpts

Tuesday 24th June 2025 Commons Chamber

[James MacCleary (Lewes) (LD)]

I declare an interest as the chair of the all-party parliamentary group on early education and childcare.

Early years providers are facing an escalating financial crisis. The Government’s latest tax increases will add an average of £40,000 a year to staffing costs for early years providers. Hopscotch nurseries—a group operating across Sussex, including in Seaford in my constituency—estimates that increases to employment costs will add £140,000 to its wage bill, and this comes at a time when 84% of nurseries nationwide report that they cannot find suitable staff. Staffing accounts for nearly three quarters of their running costs, and these financial pressures mean nurseries face closure or fee hikes that families cannot afford.

On recent visits to nurseries in my local community, I have heard from practitioners working with young children every day that, although the Government’s aim to expand funded childcare is laudable, there are simply not enough qualified staff available to deliver it. Not enough applicants, a lack of qualifications, low salaries and a high turnover have led to many nurseries operating at well below capacity. One nursery in Newhaven in my constituency recently told me that it takes only half the number of children it could take. This is not because of a lack of demand—far from it—but because of a lack of qualified staff to care for children safely.

An Early Years Alliance poll of 1,000 nurseries in March found that two in five nurseries are set to reduce the number of Government-funded places for three and four-year-olds to cover rising costs, including the increases to the minimum wage and employer’s national insurance. This is the direct opposite of the Government’s stated desire to expand provision of funded hours in early years.

As a parent of young children myself, I share the frustration at rising childcare fees, with childcare in the UK among the most expensive in the world. Private and voluntary nursery providers, which deliver the majority of early years education, are particularly vulnerable. Without urgent intervention, we risk a mass closure of facilities that are integral not just to child development, but to our local economies and communities. A survey this month by the Early Education and Childcare Coalition showed that nearly 20% of nurseries are operating at a loss.

I urge Ministers to reconsider exempting early years providers from their national insurance increases to prevent nurseries from being pushed into closure. We cannot afford to lose more essential childcare places. This is also a question of opportunity and fairness. Investment in early childhood education has been repeatedly proven to significantly narrow achievement gaps, benefiting disadvantaged children. I support the Government’s aim to expand funded childcare and the provision of free school meals, but without adequate funding for providers, there is a real danger the Government could end up putting nurseries out of business and increase the strain on school budgets breaking even. I implore Ministers to find ways to support our nurseries, including an exemption from the Government’s national insurance hike, to deliver education and support to our children in a way that is financially sustainable for both parents and providers.