A survey carried out by sector body Early Education in association with education unions the NAHT, NEU and UNISON, has found that more than half of all maintained nursery schools in England had an in-year deficit in 2021-22 and 28% of had a cumulative deficit.  Only 4 in ten (41%) had been able to set a balanced budget for 2022-23.  44% could not and 15% didn’t yet know if they were able to. 

Maintained nursery schools, like other early years providers, struggle to cover their costs from government funding, and in many cases have to generate income from other sources to be viable.  The situation was worsened by the pandemic, which increased costs and reduced income.

The survey found that some MNS are not able to meet their statutory requirements within budget.  Maintained nursery schools have higher costs than other providers, as they are required to employ qualified teachers and a headteacher and meet the same standards and requirements as other schools.  Unlike primary schools they do not receive an annual lump sum or have the same economies of scale.  These additional costs are theoretically recognised in the funding formula by the maintained nursery schools’ supplementary funding, but the formula is based on historic local funding decisions rather than actual costs or any consistent national approach.

Factors impacting on respondents’ ability to set a balanced budget included increased costs of staffing, including Covid-related staff cover costs, increased energy costs and decreased income streams including numbers of children attending not having recovered from the impact of the pandemic.

In order to balance budgets, MNS are having to cut staffing and services to the extent that for some the only teacher on site will be the headteacher.  This jeopardises the high quality of teaching which research has repeatedly shown makes a crucial difference to children’s outcomes in some of the most disadvantaged communities in the country. 

The survey data suggests further closures are likely as 2% of respondents were already consulting on closure or expecting to do so imminently; 12% were in discussion about their future with their local authority, and 21% expected to face closure within three years on current budget projections.

There is an urgent need for a revised funding formula for MNS to ensure that funding is sufficient to deliver at least the minimum statutory requirements which apply to MNS.

As one survey respondent explained:

“The impact of COVID on our financial situation alongside our inability to income generate during restrictions has had a catastrophic impact on our capacity to offer the range of services we previously have. This is particularly damaging at a time when stressed families who have been navigating the trauma of a pandemic need us and our services more than ever before.”

Early Education’s Chief Executive, Beatrice Merrick, said:

“Ministers have consistently recognised the extraordinary contribution which maintained nursery schools make to children’s life chances in some of the most disadvantaged areas of the country.  The last Spending Review provided the first steps towards greater certainty about their future, and we now await the next steps in funding reform, which must include a review of the MNS supplementary funding to ensure a fair, consistent and viable formula to secure these vital schools for the future.”

Dr Mary Bousted, Joint General Secretary, National Education Union said:

“Maintained nursery schools have proven time and time again that they are centres of excellence; almost all are graded as outstanding or good by Ofsted.  They are often located in the most deprived areas of the country and provide skills and resources which support neighbouring early years settings.  It is essential that these settings are not lost. Yet the government remains ambivalent to their dire financial situation, and inaction is leading to further closures. This is unacceptable and cannot be allowed to continue. The NEU will continue to campaign and work with stakeholders to prevent further closures and demand that the government acts now to guarantee maintained nursery schools will have viable long-term funding.”

Paul Whiteman, Secretary General of the NAHT, said:

“The confirmation of a long-term funding commitment for maintained nursery schools was very welcome. However, it is clear that this alone will not address the issues the sector is facing. What we now need to see is a review of how funding is distributed, as well as immediate financial support for those nurseries facing the biggest financial challenges. Successive governments have pledged their commitment to the maintained nurseries, now is the time to match that commitment with actions and secure their long-term future”

UNISON assistant general secretary Jon Richards said:

“Nursery schools are facing a crisis. The only way to secure their future is to ensure there’s a fair, long-term funding settlement that pays staff the wages they deserve. Nursery schools have a history of providing high quality services in some of the most deprived parts of the country. This mustn’t be put at risk by short-sighted funding cuts that’ll let down children, parents and whole communities.”

The survey took place online in April/May 2022.  All 385 MNS were emailed details of the survey with multiple reminders.  A total of169 responses were received representing 172 schools in 74 local authorities (45% response rate).