Nursery Management

Early years sector challenges

  • Early years sector challenges

In May 2021, the Mayor of London launched a new programme of business support for the capital’s private, voluntary and independent (PVI) early years settings.

Coordinated by the Early Years Alliance, ‘Strong Early Years London’ helps nurseries and childminders to access business support information, advice and guidance, and provides intensive support to those most in need. 

Independent researchers at Ceeda are tracking sector trends in the capital to help inform the support programme. Our latest findings reveal a sector beset by staffing challenges and low occupancy levels. 

Research conducted by Ceeda in November and December 2021 showed that many London settings are still struggling to keep their heads above water almost two years into the pandemic; 43% of nurseries and pre-schools and 32% of childminders were operating at a loss. 

The survey showed occupancy in nursery and pre-school settings averaged 65% in the autumn term, and 61% in childminding provision. Overall figures mask significant variation with one in five nurseries and pre-schools (20%) and one third of all childminders (34%) reporting occupancy of 40% or less.

Key difficulties

Top challenges for nurseries and pre-schools included funding rates lower than the cost of delivering funded places (71%), increases in staffing costs (63%), difficulties in recruiting (52%) and retaining staff (25%), and supporting staff wellbeing (50%). 

One in two nurseries and pre-schools in London were recruiting at the time of the survey (49%) for an average of 3.6 vacant posts. A staggering 96% reported difficulties in filling their vacancies.

Feedback on hard-to-fill vacancies flagged level 3 posts as the main challenge, but difficulties were experienced across many roles including amongst others: level 3 posts (68% of organisations recruiting), cook (8%), level 2 posts (6%) and apprentices (6%). 

A shortage of skilled qualified staff, low pay rates, shift patterns and the impact of Brexit on staff supply were among the reasons flagged by providers for their recruitment difficulties. 

For childminders, key challenges included declining demand (53%), short-term financial losses (44%), increasing costs (42%) and inadequate funding rates (41%). Two fifths of childminders were finding it hard to look after their own wellbeing (41%), up from 27% in the summer of 2021.

Supporting sector sustainability

The Strong Early Years London programme provides free business support via webinars, online resources and 1-to-1 consultancy. Free 1-to-1 consultancy involves an expert working with a setting to provide support on a specific issue in their provision.

When asked if there were any areas in their provision where 1-to-1 support would be helpful, over two-thirds of surveyed nurseries and pre-schools (68%) and 58% of childminders identified one or more needs. 

Nurseries and pre-schools were most interested in support to help tackle workforce challenges, including expertise around recruitment (30%), staff wellbeing (26%), staff management, supervision and appraisal (20%). Demand was also high for support around regulation and inspection (37%).

Support around issues relating to Ofsted and the EYFS were also uppermost for childminders (44%), whilst 1-to-1 support in managing personal wellbeing (23%) and professional development (20%) were also in demand. 

Survey feedback suggested that time is the biggest barrier to accessing free 1-to-1 support. Meeting the day-to-day challenges of Covid-19 and related staffing shortages left providers little time to focus on solutions. 

Providers taking up assistance through the programme are, however, feeling the benefits: 

“You can have no idea how much I appreciate the time you gave me today. My belief in myself is a little restored and I am looking forward to absorbing from the links you kindly shared with me.” Larry Simpson, Petts Wood Playgroup

Neil Leitch, CEO of the Early Years Alliance, commented: “The impact of Covid-19, combined with the many pressures early years settings are already under, makes for a painful day-to-day reality for early educators delivering essential education and care within our capital. 

“Early education is at the root of so many communities so, combined with years of underfunding, the absence of a national plan to support this sector to recover from two years of Covid measures can only be detrimental to the families that rely on nursery, pre-school or childminding settings. 

“Add to that a staffing crisis stemming from low wages, and lack of clear career pathways into and through early years, and we can see why providers are left not only struggling to remain viable, but with little time to focus on solutions to the business challenges they face. 

“Ultimately, a resolution to what can only be called a crisis for our early years sector will require strong action from government.

“In the meantime, we are so pleased that the service we are able to provide through the Strong Early Years London scheme represents a lifeline for those providers that access it, and we hope to successfully support many more settings in 2022.” 

Deputy Mayor for Education and Childcare, Joanne McCartney said: “Good quality early years education and childcare provision play a crucial role in giving the next generation of Londoners the best possible start in life.

“Ceeda’s timely research highlights the challenges facing the sector, and gives insight to the pressures that many providers are experiencing.

“The Mayor’s investment in the Strong Early Years London programme has helped alleviate some of these pressures by providing free business support and resources, and I am pleased that nurseries, pre-schools and childminders are reporting that they are benefitting from this support.

“However, it is clear that the government now needs to step up, increase investment in the early years, and provide a clear action plan to help tackle the training and recruitment difficulties that the sector is reporting.”

To find out more about free business support available to early years settings in London, please call the free helpline on 0207 697 2510 or visit

For information about wider support provided by the Early Years Alliance, visit