Cost of Living Survey Results

A new survey by childcare insurance company, Morton Michel, has shown that childcare providers are already feeling the impact of the cost of living crisis, even as they battle the ongoing impact of the Pandemic and difficulties in recruiting new staff.

The survey, which was carried out between 13 – 30 June, received over 500 responses from different providers in the sector and clearly demonstrates the challenges now facing this critical industry.

Cost of Living Impact

Childcare providers were asked to rate impact of the cost of living crisis on their business out of 10. Across all respondents, the average figure was 6, with almost three quarters (72%) rating the impact above 5 and more than a third (34%) rating it above 7.5).

Broken down according to provider type, the unregulated children’s activity sector most concerned, with an average rating of 7/10 and almost half (47%) rating their concern above 7.5. This is perhaps down to parents already cutting back on activities not seen as essential, as well as the unsubsidised nature of this sector.

Although the survey suggests the unregulated sector is the most vulnerable, there is not a lot of comfort for regulated providers. Nurseries, preschools and out of school clubs’ average rating was barely below 7/10 and 40% rated their concern above 7.5. Home childcarers seemed to be a little more insulated, although childminders still rated their concern at an average of 6/10, with 35% of respondents placing it above 7.5. Nannies appear to be the least worried, with an average rating of 4.5/10, though even in that sector, 20% rated their concern above the 7.5 level.

Commenting on the situation, one childminder respondent highlighted the sector’s worries as the weather begins to cool and energy prices rise:

“I think childminders should pay less utilities as it will be difficult in the winter to keep the house warm, especially in Yorkshire and more northern areas. I worry that the cost of living will go up so much that childcare has to also increase and then parents can’t afford to pay.”

Recruitment Concerns

The sector was facing recruitment difficulties since before the Covid-19 crisis. Morton Michel’s survey asked how providers are finding recruiting staff since the pandemic. Once again they were asked to give a rating out of 10, with 10 indicating the most severe difficulty. Across all sectors employing staff, the average rating was 6.5/10 with 78% giving a rating about 5 and 35% above 35.

The position of nurseries and preschools was particularly stark, with over half of all respondent rating their recruitment difficulties at above 7.5. Notably this contrasted with just 17% of respondents in the unregulated children’s activity’s sector. However, children’s activity providers did still rate their recruitment difficulties at an average of 6/10, compared with 7/10 for nurseries, so it is clear that recruitment is challenging across the board.

Rising inflation and the cost of living may be having an impact on recruitment too, as employers are forced to raise wages to keep pace. One respondent commented:

“The continual rise of minimum wage requirements has a huge impact too, I am loath to have to increase costs as I am aware of parents already being in financial crisis due to the current financial environment.”

Ongoing Covid Impact

Morton Michel’s survey also asked childcare providers to assess the ongoing impact of the pandemic on children’s independence, temperament and ability to focus. As before, they gave ratings out of 10, with 10 being the most severe impact. Overall the results suggest moderate long term consequences, with the average severity being 4/10 with just 10% of providers rating it above 7.5

Notably some of the highest scores and therefore greatest concern came from the parent and toddler sector, where parents are evaluating their own children – and those of other parents’ behaviour. 29% of providers rated the impact on children’s focus as above 7.5/10, while the figure for impact on independence was 17%, both significantly above the average.

While the impact of Covid is still clearly present, it is perhaps a testament to the very hard work of childcare providers throughout the pandemic, that these scores are not more concerning. One provider from the children’s activity sector referenced how settings had adapted during lockdowns saying:” Zoom worked well…but it is nowhere near as good as seeing children in person.”