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Please find below a release from the Early Years Alliance on a survey of early years providers which found that if the government does not provide the early years sector with additional financial support towards rising energy costs once the current Energy Bill Relief Scheme ends in March 2023:

• around seven in 10 nurseries and pre-schools would have no option but to increase parental fees 

• over one in 10 nurseries and pre-schools would be forced to close permanently

The Alliance is calling for the early years sector to be included on the government’s list of ‘vulnerable’ industries set to receive support after the initial six-month period has ended.

Nurseries, pre-schools and childminders in England have warned of further closures and cost rises if energy support is not extended, a new survey by leading early years membership organisation the Early Years Alliance has found. 

The survey, which ran online from 17 to 24 October and received 1,265 responses, found that nearly seven in ten (68%) nurseries and pre-schools and three in five (61%) childminders said they are likely to have to increase fees for parents over the next year in order to meet the rising cost of energy if financial support from the government does not go beyond March 2023. While more than one in ten (11%) nurseries and pre-schools and over one in 20 (6%) childminders warned that they would be likely to close permanently. 

Since 1 October, a six-month energy price cap for businesses has been in place to help industries manage rising gas and electricity costs. From the same date, a separate six-month cap for households has been enforced which limits the cost of energy to £2,500 for an “average” household.  

Both schemes will end in March, when the government will introduce targeted support for households in need of support and “vulnerable” industries, with details of this support yet to be announced – however, over two-thirds (78%) of childminder survey respondents and four in five (77%) of nursery and pre-school respondents said they did not believe that six months of support was long enough. In fact, nearly all the providers surveyed called for the early years sector to benefit from additional energy support: in total, 99% of nurseries and pre-schools called for the early years to be included in the government’s list of “vulnerable” business sectors set to receive targeted support beyond the initial six-month period, while 96% of childminders stated that they believed that home-based businesses like childminding settings should be given support for energy costs above and beyond the general energy price guarantee for households. 

The survey also found that early years settings have already started to feel the effects of this year’s rising costs. When asked what steps they have had to take over the past year as a result of rising energy costs, more than three in five (62%) of nurseries and pre-schools and eight in ten (81%) of childminders said that they have had to reduce energy usage at their setting, while almost half (48%) of childminders and around two-thirds (65%) of pre-schools and nurseries have already had to increase fees for parents to meet energy costs.  

The survey also found that an overwhelming majority of respondents do not believe that the government has provided enough overall support to help early years manage the sharp increases in electricity and gas prices, with the view shared by nearly nine in ten (86%) nurseries and pre-schools and more than nine in ten childminders (91%).   

Survey respondent comments included:  

• “This sector is already dreadfully underfunded, so the energy increases have added to our financial concerns. We don’t want to raise our fees as our parents are already struggling with the day-to-day cost-of-living.” 
  
   

• “The importance of early years settings is always talked about by the government; however, they do not seem to consider the essential costs of a setting when they allocate funding. Early years settings are expected to supply care and education of the highest quality, but on the most limited budgets.” 
  
   

• “I have asked parents to leave a thick jumper and trousers here in case needed. We also limit the energy we use out of business hours and we have the heating turned off in our bedroom so there is more available for the children attending.” 
  
   

• Looking after children, it is not possible to reduce energy costs in the same way normal households are expected to do. We have to maintain high standards and a safe, warm, healthy environment … We are expected, as part of covid safe measures, to have ventilation permanently, which again results in heat being lost. In order to work to expected, registered standards, our energy usage and costs are high.” 

 

• We're already struggling due to the government’s low funding rates and have to prioritise what we spend and when, without the added worry of rising utility costs to further add to that. Many nurseries have closed and were already under pressure – this is going to cause further closures and letting families down in areas that probably need the childcare the most.” 

 

Commenting, Neil Leitch, CEO of the Early Years Alliance, said: 

“Our survey results clearly show that current government support does not go anywhere near far enough to support England’s early years sector through the current energy crisis.  

“We’re only at the start of the winter months and already nurseries, pre-schools and childminders have been forced to reduce energy usage, cut costs and raise fees just to keep their doors open. 

“We know that, even before the current crisis, many settings were hanging by a thread as they battled through years of underfunding. There’s no doubt that unless more action taken, rising gas and electricity costs could be a nail in the coffin for many more high-quality settings across the country.  

“As such, it is vital that, at the very least, nurseries and pre-schools are included in the government’s list of “vulnerable” industries that is set to receive further support beyond March, and that government recognises the additional pressures on home-based businesses like childminding settings and provides the additional financial support they need to remain sustainable. 

“Early years settings not only provide the childcare that so many parents need to be able to work, but also deliver vital early education for young children, teaching them vital skills that stay with them for life. Now more than ever, it is critical that the government recognises just how precarious a position the sector is in, and ensure that providers receive the support that they need, for as long as they need it.”  

EDITOR NOTES

The survey received 446 responses from nurseries and pre-schools and 819 responses from childminders. 

FULL SURVEY FINDINGS 

The following questions were asked to nurseries and pre-schools only 

 

How would you describe your setting? 

Both owner and manager: 22% 

Owner: 14% 

Manager: 40% 

Deputy manager: 4% 

Early years teacher/professional: 1% 

Other Level 6 early years qualification holder: 0% 

Room leader: 1% 

Level 4 or 5 educator: 1% 

Level 3 educator: 1% 

Level 2 educator: 0% 

Level 2 assistant: 0% 

Unqualified educator: 1% 

Apprentice: 0% 

Administrator: 10% 

 

Do you pay for your settings energy costs directly? 

Yes: 56% 

No, but it is included as part of other setting charges e.g. our premises service charge: 30% 

No, we don’t pay for any energy costs [diverted out]: 6% 

Other (please specify): 9% 

 

[If included as part of wider charges] Do you know what proportion of these charges reflect your setting’s energy costs? 

Yes: 24%  

No (diverted out): 76% 

 

Compared to this time last year, have your energy costs: 

Increased: 91% 

Stayed the same: 9%  

Decreased: 0% 

 

How much have energy costs increased compared to this time last year? 

5% or less: 1%  

6-15%: 9%  

16-25%: 16% 

26-50%: 21%  

51-75%: 13%  

76-100%: 10% 

More than 100%: 17% 

Unsure: 13% 

 

What steps, if any, has your setting had to take over the past 12 months as a result of the impact of rising energy costs? Please select all that apply 

Increasing fees for parents: 65% 

Regularly reducing the amount of energy used at the setting (for example: by limiting heating, lighting or preparing cold food rather than hot): 62% 

Limiting staff pay increases: 51% 

Using cash reserves from the business to cover energy costs: 39% 

Introducing/increasing additional charges for parents: 24% 

Reducing staffing numbers: 22% 

Using personal savings to cover energy costs: 11% 

Going into the setting’s overdraft/debt: 11% 

Reducing opening days/hours: 8% 

Delaying payments to energy suppliers: 7% 

Going into your personal overdraft/debt: 7% 

Taking out a bank loan to cover energy costs: 4%  

None: 4% 

Failing to pay energy bills at all: 1% 

Permanently closing your business: 1% 

Temporarily closing your business: 0% 

Other (please specify): 9% 

 

Have rising energy costs had a negative impact on the financial health of the setting? 

Yes: 91% 

No: 9% 

 

On a scale of 1-10, how significant a negative impact are rising energy costs having on the financial health of your setting (1: not significant at all, 10: very significant)? 

Average Number: 8 

 

Have rising energy costs had a negative impact on the quality of provision of the setting (such as limiting your ability to invest in new resources, hire new staff etc)? 

Yes: 64% 

No: 36% 

 

On a scale of 1-10, how significant a negative impact are rising energy costs having on the quality of provision at your setting (1: not significant at all, 10: very significant)? 

Average Number: 7 

 

Is your setting on a variable or fixed energy contract? 

Fixed: 42%  

Variable: 36%  

Mixture of the two across gas and electricity: 22% 

 

[If fixed] Do you know when your contract will end? 

Yes: 58% 

No: 42% 

 

Has being on a fixed tariff resulted in you paying more for your energy bills than you would if you were on a variable tariff, in light of new price cap for businesses? 

Yes: 19%  

No: 27% 

Unsure: 54% 

 

[If variable] Do you know when your contract will end? 

Yes: 17% 

No: 83% 

 

What impact are you expecting the six-month energy price guarantee to have on your setting’s overall ability to pay energy bills? 

Significant positive impact: 5% 

Somewhat positive impact: 23% 

Neither positive nor negative impact: 26% 

Somewhat negative impact: 12% 

Significant negative impact: 15% 

Unsure: 18% 

 

To what extent do you agree with the following statement: ‘Six months is the right length of time for an energy price cap for businesses? 

Strongly agree: 2%  

Somewhat agree: 5% 

Neither agree nor disagree: 15%  

Somewhat disagree – it should be for a longer period: 27% 

Strongly disagree – it should be for a longer period: 50%  

Somewhat disagree – it should be for a shorter period: 1%  

Strongly disagree – it should be for a shorter period: 1% 

 

If the new energy price guarantee ends after six months, which of the following steps, if any, do you expect have to take to meet your setting’s energy costs over the next year? Please select all that apply 

Increase fees for parents: 68% 

Regularly reduce the amount of energy used at the setting (for example: by limiting heating, lighting or preparing cold food rather than hot): 63% 

Limit staff pay increases: 61%  

Use cash reserves from the business to cover energy costs: 45%  

Introduce/increase additional charges for parents: 43%  

Reduce staffing numbers: 27% 

Use personal savings to cover energy costs: 13%  

Reduce opening days/hours: 11% 

Permanently close your business: 11%  

Go into the setting’s overdraft/debt: 11%  

Delay payments to energy suppliers: 11%  

Take out a bank loan to cover energy costs: 9%  

Go into your personal overdraft/debt: 4% 

Temporarily close your business: 4% 

Fail to pay energy bills at all: 3% 

None: 2% 

 

If the new energy price guarantee was extended and stayed in place for the early years sector for two years, which of the following steps, if any, would you expect to have to take to meet your setting’s energy costs over the next year? Please select all that apply 

Increase fees for parents: 44% 

Regularly reduce the amount of energy used at the setting (for example: by limiting heating, lighting or preparing cold food rather than hot): 43%  

Limit staff pay increases: 36%  

Introduce/increase additional charges for parents: 25% 

Use cash reserves from the business to cover energy costs: 22%  

None: 17% 

Reduce staffing numbers: 11% 

Go into the setting’s overdraft/debt: 6%  

Delay payments to energy suppliers: 6%  

Reduce opening days/hours: 5% 

Permanently close your business: 5%  

Take out a bank loan to cover energy costs: 4% 

Use personal savings to cover energy costs: 3% 

Go into your personal overdraft/debt: 3%  

Temporarily close your business: 1% 

Fail to pay energy bills at all: 0% 

 

Do you think the government has provided enough support to help nurseries and pre-schools meet the rising costs of energy? Please briefly explain your answer 

Yes: 1% 

No: 86% 

Unsure: 13% 

 

What, if any, additional support would you like the sector to receive? Please select all that apply 

Increase of length of energy price guarantee for businesses beyond six months: 64%  

Regular payments to help cover energy costs: 64%  

Reduction of energy costs through the taxation of energy companies: 56%  

Lower limit on price cap: 49%  

A one-off payment to help cover energy costs: 20%  

No further support: 1%  

 

The government has said that the six-month energy price guarantee for business may be extended for sectors and industries deemed as ‘vulnerable’. Do you think that the early years should be included on this list of vulnerable sectors?   

Yes: 99% 

No: 1% 

 

The following questions were asked to childminders only  

 

Do you (or another household member) pay for your household energy costs directly? 

Yes, I / we receive energy bills directly: 100% 

No, it is included as part of other charges e.g. rental charges: 0% 

No, I don’t pay for any energy costs: 0% 

 

Compared to this time last year, have your energy costs: 

Increased: 98% 

Stayed the same: 2%  

Decreased: 0% 

 

How much have energy costs increased compared to this time last year? 

5% or less: 1%  

6-15%: 3%  

16-25%: 8%  

26-50%: 24% 

51-75%: 26%  

76-100%: 13% 

More than 100%: 12% 

Unsure: 13% 

 

What steps, if any, have you had to take over the past 12 months as a result of the impact of rising energy costs? Please select all that apply 

Regularly reducing the amount of energy used at the setting (for example: by limiting heating, lighting or preparing cold food rather than hot): 81%  

Increasing fees for parents: 48% 

Using personal savings to cover energy costs: 35%  

Going into your personal overdraft/debt: 18% 

Introducing/increasing additional charges for parents: 9% 

Reducing opening days/hours: 5%  

Delaying payments to energy suppliers: 4% 

Going into the setting’s overdraft/debt: 2%  

None: 2% 

Taking out a bank loan to cover energy costs: 1%  

Failing to pay energy bills at all: 1% 

Temporarily closing your business: 0% 

Permanently closing your business: 0% 

 

Have rising energy costs had a negative impact on the financial health of your childminding setting?  

Yes: 86% 

No: 14% 

 

On a scale of 1-10, how significant a negative impact are rising energy costs having on the financial health of your setting (1: not significant at all, 10: very significant)? 

Average Number: 7 

 

Have rising energy costs had a negative impact on the quality of provision of the setting (such as limiting your ability to invest in new resources)? 

Yes: 80%  

No: 20% 

 

On a scale of 1-10, how significant a negative impact are rising energy costs having on the quality of provision at your setting (1: not significant at all, 10: very significant)? 

Average Number: 7 

 

Is your household on a variable or fixed energy contract?  

Fixed: 28% 

Variable: 63%  

Mixture of the two across gas and electricity: 10% 

 

[If fixed] Do you know when your contract will end? 

Yes: 59%  

No: 41% 

 

Has being on a fixed tariff resulted in you paying more for your energy bills than you would if you were on a variable tariff, in light of the new price cap? 

Yes: 26% 

No: 23%  

Unsure: 52% 

 

 [If variable] Do you know when your contract will end? 

Yes: 12%  

No: 88% 

 

What impact are you expecting the six-month energy price guarantee to have on your childminding setting’s overall ability to pay energy bills?  

Significant positive impact: 6% 

Somewhat positive impact: 21% 

Neither positive nor negative impact: 25% 

Somewhat negative impact: 17%  

Significant negative impact: 17%  

Unsure: 15%  

 

To what extent do you agree with the following statement: ‘Six months is the right length of time for an energy price cap for households’ 

Strongly agree: 2% 

Somewhat agree: 5%  

Neither agree nor disagree: 13% 

Somewhat disagree – it should be for a longer period: 18%  

Strongly disagree – it should be for a longer period: 60%  

Somewhat disagree – it should be for a shorter period: 0%  

Strongly disagree – it should be for a shorter period: 2% 

 

Taking into account the energy price guarantee and the fact that it will be applied universally for six months, what steps are you expecting to have to take to meet your setting’s energy costs over the next 12 months? Please select all that apply 

Regularly reduce the amount of energy used at the setting (for example: by limiting heating, lighting or preparing cold food rather than hot): 75% 

Increase fees for parents: 61%  

Use personal savings to cover energy costs: 38%  

Introduce/increase additional charges for parents: 22% 

Go into your personal overdraft/debt: 18%  

Reduce opening days/hours: 9%  

Delay payments to energy suppliers: 7% 

Permanently close your business: 6%  

Take out a bank loan to cover energy costs: 3%  

Go into the setting’s overdraft/debt: 3%  

Temporarily close your business: 2%  

Fail to pay energy bills at all: 1% 

None: 1% 

 

Do you think the government has provided enough support to help childminding settings meet the rising costs of energy? 

Yes: 3% 

No: 91%  

Unsure: 6% 

 

Do you think that home-based businesses, such as childminding settings, should be given support for energy costs above and beyond the general energy price guarantee for households?  

Yes: 96%  

No: 4%