A “perfect storm” of rising childcare costs and providers closing down could make it “impossible” for some parents to return to work amid the coronavirus pandemic, Labour says.
The party says childcare costs in England have risen up to three times as fast as wages since 2010.
And it is calling on the government to “urgently provide targeted support” to the childcare sector.
The government said the sector had received “significant” support.
Nurseries, pre-schools and childminders have been allowed to open to all children since 1 June following the coronavirus lockdown.
And as part of easing lockdown restrictions, the government has said people who can, no longer have to work from home.
However, Labour warns that many parents will struggle to return to workplaces without adequate childcare, particularly if families cannot rely on grandparents for help due to the virus.
It says “long-term underfunding and a lack of targeted support during the coronavirus pandemic, will make it impossible for many providers to remain viable”.
The party points to research carried out by Early Years Alliance – the nursery sector body – which found that 25% of childcare providers in England are at risk of closing in the next year.
Last month, the alliance also published data suggesting that since reopening nurseries have only been operating at 37% of their capacity, creating financial pressure for providers.
Labour’s shadow education secretary Kate Green said: “Ordering parents back to work without allowing them to access the childcare they need is a stark reminder that Boris Johnson is completely out of touch with the needs of working families.”
‘We don’t want to let our families down’
Clare Matthews runs Sunny Days Pre-school in West Molesey, Surrey, with her husband Richard.
The business has been a success, but when lockdown hit, the couple could not afford to stay open for key workers’ children.
“All providers are having to make tough decisions to maintain their nurseries and just to get through this,” she says.
“The parents were really supportive when we gave them our reasons and they trusted us, but they think we are getting government support, and the money just isn’t there.”
Clare says the only coronavirus-related scheme Sunny Days qualified for was the business rate holiday, and when they applied for more funding from their local council, they were rejected and told to “come back when it comes to crunch time”.
She says: “It is really stressful. We don’t want to let our families down, we want our children back and we want to do it safely.”
Parents want to come back to the nursery in September, when it plans to re-open, but Clare said some are “scared” of what the future may hold.
“I had a call from one parent today who is genuinely concerned because his employer ‘suggested’ his job would be at risk if he didn’t get his childcare sorted by next month,” she said.
“We are very strong and have good contingency plans in place, but I am seeing good nurseries close every week and it has people at panic stations.”
Clare wants the government not just to think of short term fixes for the sector, but to “reflect” and look at a long-term recovery plan to up the funding for early years’ care.
“Everybody is trying to make sure they can provide childcare, but the government and ministers need to recognise the problems and listen,” she says.
“If the government doesn’t put support in place quickly, I think there are going to be a lot more closures to come.”
Meanwhile a senior Labour MP has raised concern about the options for those coming to the end of their maternity or paternity leave.
Catherine McKinnell, chair of the Commons Petitions Committee, said some parents face “a dreadful dilemma of having to prepare to return to work… at a time when finding suitable childcare is nearly impossible”.
“Our investigation found some parents have even had to give up their jobs because there has been no financially viable way to extend their leave,” she said.
She also expressed disappointment that the government had not responded to her committee’s report on the subject.
In a letter, Business Minister Paul Scully said a response to the report had not been issued before the recess due to the need for “careful consideration of recommendations” and for discussions with counterparts in other departments.
Purnima Tanuku, chief executive of the National Day Nurseries Association charity, said greater funding is needed as the situation is “clearly not sustainable”.
“Since lockdown, nurseries have also had to absorb additional operating costs such as installing more handwashing stations and extra cleaning, but as costs have increased, their income has dropped due to low numbers of children,” she said.
“The government has given most local authorities an extra 8p this year per hour per child, but this won’t even cover inflation, let alone take account of above-inflation national minimum and living wage rises.”
A Department for Education spokeswoman said early years providers would benefit from £3.6bn funding from next year for free early education and childcare places.
“We are continuing to provide extra security to nurseries and childminders that are open by ‘block-buying’ childcare places for the rest of this year at the level we would have funded before coronavirus – regardless of how many children are attending,” she said.
In Scotland, the government has had to delay implementing a pledge to provide free early years care due to coronavirus – something First Minister Nicola Sturgeon said she “deeply” regretted.
A £10.5m fund to help childcare providers to reopen following the lockdown has been set up in Northern Ireland.
And in Wales, the government says it has made £2.6m available to provide care for the children of key workers.