Childcare Annual Survey 2017 · 3 Morton Michel Annual Survey 2017 Executive Summary Morton Michel’s childcare survey was conducted between 1st August and 2nd October 2016. 1,523

Childcare Annual Survey 2017

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Morton Michel Annual Survey 2017

Contents

Executive SummaryOutlook and Attitudes

Industry Outlook

Industry Attitude

Individual Outlook

Individual Attitude

Career MotivationJob Satisfaction

Professional Respect

Job Flexibility

Professional Support

Career Development

Professional SupportSource of Support

Quality of Support by Sector

Quality of Support by Provider

Extended Funded Place EntitlementChildminders

Nurseries

Sessional Providers

Extra Services

MarketingChildminders

Nurseries

Sessional Providers

Nannies

Sectors AnalysisChildminders

Nurseries

Sessional Providers

Nannies

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Executive SummaryMorton Michel’s childcare survey was conducted between 1st August and 2nd October 2016. 1,523 respondents took part, representing a wide cross-section of the childcare industry. The aim of the survey was to provide a unique set of data, offering visibility both on the disposition of the industry as a whole and broken down according to various sectors.

This is a turbulent time for the childcare industry. The snap general election notwithstanding, it is expected that this year will see the introduction of 30 Free Hours in England, a policy widely regarded as having the potential to fundamentally change the nature of the childcare industry. Similar policies are to be enacted in the other home nations and are similarly expected to represent a seismic change. Against this background there are other challenges. The number of childminders is falling, dipping below 45,000 at the end of 2016, a drop of more than 10,000 since 2012. Amongst non-domestic providers, numbers are also falling, although places remain stagnant, suggesting nurseries and pre-schools are consolidating. There are also large numbers of unregistered childcare providers such as nannies, of whose contribution to the sector, there is little visibility.

Outlook and AttitudeThe survey asked a number of questions assessing the outlook and attitude of its respondents. While the results were varied, even polarised, between optimistic or pessimistic responses, there was a notable difference between the answers given when considering the childcare industry as a whole, and when considering just the respondents’ own businesses. Overall lower numbers predicted their own businesses would shrink than the industry as a whole, and likewise higher numbers had a generally positive attitude towards the future of their own businesses when compared to the whole industry. The childcare sector is known to be resilient and innovative. These results suggest respondents often feel they are ahead of the game. With that said, when asked to consider their attitude in 2015, the majority recollected feeling more optimistic at that time.

Career MotivationConsidering what can be done to retain childcare workers, the survey asked respondents to rank six factors in order of their importance to their remaining in the industry: job satisfaction, professional respect, job flexibility, remuneration, professional support and career development. The responses unequivocally listed job satisfaction as most important while there was broad consensus that career development was the least important factor. There was more variation amongst the other categories, particularly between the different types of provider.

These results do not necessarily indicate that factors such as career development and professional support are unimportant to childcare providers. Rather they confirm those to whom they are not important are more likely to stay. The government’s workforce strategy emphasises both access to training and careers advice. If successful this may attract a workforce with different priorities and these results may shift.

Professional SupportRespondents were asked to state who provided the majority of their professional support. Local authorities were the most common source across the sector, with the exception of nannies, for whom private providers were more common, although many simply stated they receive no support. Respondents were also asked to rate the quality of the support they received. Although a middling-rating was the most common, positive ratings out-performed negative by a 16-point margin. Broadly, support provided by employers was rated highest, followed by private providers and local authorities.

Extended Funded Place Entitlement (30 Free Hours)The survey was conducted before many of the details were known about how the extended entitlement will operate, however, its results are still indicative of the pool of capacity available, especially when compared to the existing funded entitlement.

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Compared with the current entitlement, more respondents may consider offering 30 hours, however fewer say that they are certain to do so. Even these numbers only hold among the respondents as a whole. Fewer nursery respondents indicated they might offer the extended entitlement than currently do, suggesting that even if the policy successfully addresses the concerns of those who are unsure, childminders and sessional providers such as playgroups and pre-schools will have to deliver the necessary capacity. Among sessional providers, lack of space and time meant that almost a quarter are unable to offer the extended entitlement at all.

Funding concerns have been repeatedly raised across the industry, both in the survey responses and in the media more generally. The government is encouraging providers to offer chargeable extras such as consumables or optional classes to make up any shortfall, but this has received a mixed reception. The survey asked respondents whether they were planning to do so and large majorities of respondents across the sector are not.

MarketingRespondents were asked how they market their businesses. Word of mouth was the most common method across the board, perhaps suggesting that parents still value personal recommendations above all else. Local authorities, who have a duty to make information on childcare available were also frequently cited.

Beyond this, there were marked differences between types of provider. Nurseries commonly rely on their own websites, while childminders prioritise third party websites and social media. Sessional providers often have their own websites too, but also utilise traditional marketing spaces such as bulletin boards in their venues. Nannies, who operate in a different environment to the rest of the childcare industry, were an exception. Respondents most frequently made use of nanny agencies, but a significant proportion also used third-party websites, which provide no oversight or quality control over this unregulated sector.

Sector Drill-downChildminders were asked about two of the previous government’s main policies that affected their sector – childminder agencies and childminding on non-domestic premises. In both cases, the uptake has been very low, albeit not negligible, given the number of childminders in the sector. The suggestion is that with government support, new schemes have the potential to be popular, but that without it, they risk floundering. When asked to comment on the sector in general, childminders offered a mixed response, citing concerns over funding, admin, professional respect and access to support. Nurseries were asked about the number of staff they employ with Early Years Teacher Status. EYTS has a strong positive reputation within the childcare industry, but amongst nursery respondents 45% reported having no EYTS staff. When the number of EYTS staff was compared to the Ofsted rating reported, no clear pattern emerged, but given the infrequency of Ofsted inspections, more research may be necessary to determine their impact. Nursery respondents’ commentary was almost exclusively focussed on funding concerns around free hours. A particular issue cited was that parents very frequently believed that providers received the full fee they would ordinarily charge. This, it was suggested, was due to the labelling of the scheme as “free childcare”. Sessional providers were asked about their hours of operation and where they operate from. Notably for the possibility of providers offering the extended entitlement, only 20% currently operate for more than 30 hours. Half of all respondents indicated they work from community buildings. These multi-use spaces are often in demand from various organisations and may not have the capacity to permit childcare providers to use them for longer. When asked for comment, sessional providers raised concerns about funding good quality staff, the sustainability of their businesses and apprehensions about an increasingly rigorous early years curriculum.

Nannies were asked about how many households they work for and how many children they look after, as well as their qualifications. Most nanny respondents look after more than one child, with two thirds looking after two or three. Three quarters of respondents work in just one household, while less than 6% work in more than two. Even so, just 10% live in the household they work in. When asked to list their qualifications, a quarter have no relevant qualifications at all, while the remainder are a mix of childcare diplomas and higher level qualifications.

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Outlook and AttitudesRespondents were asked a set of questions to gauge their confidence in the childcare sector as a whole and their own businesses in particular. They were also asked to recollect their confidence the previous year. The results suggest a sector that feels embattled and facing great challenges, outwardly concerned about coming decline, but one that is also confident in its own resilience and ability to endure adverse conditions.

Industry OutlookAsked whether the sector will grow or shrink, the respondents were polarised, but skewed towards believing it will shrink. The results are consistent with the current relative precarity of different forms of childcare. Preschools and childminders were especially pessimistic, while nurseries, although reflecting the overall polarisation, were more likely to be positive than negative. Those who categorised themselves as ‘other sessional providers’ were most optimistic that the sector would grow. Nannies are most likely to expect no change in the coming year, reflecting their separation from the rest of the industry.

Childminder Nanny Nursery Other sessional provider Playgroup Pre-school Grand Total

Significant shrinkage 12.27% 4.14% 12.05% 5.17% 5.88% 19.48% 11.06%

Slight shrinkage 34.97% 22.76% 26.51% 24.14% 29.41% 40.26% 32.22%

No change 19.48% 37.24% 14.46% 20.69% 14.71% 9.09% 20.69%

Slight growth 26.99% 31.03% 33.73% 37.93% 32.35% 23.38% 28.60%

Significant growth 6.29% 4.83% 13.25% 12.07% 17.65% 7.79% 7.44%

How do you anticipate the childcare industry changing during the next year?

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Industry AttitudeDespite respondents’ concerns about the sector’s growth potential, attitudes around the sector’s future as a whole are more positive. Very few respondents reported feeling very negative about the future of the childcare industry, with preschools the least optimistic. Overall, there is a significant ambivalence, present across the industry, with responses mid-way between negative and positive chosen by nearly half of all childminders, playgroups, others sessional providers and nannies, and a third of nurseries and preschools. Nannies, other sessional providers and playgroups were the most likely to report feeling very positive about the future, accounting for more than 10% of respondents from each sector.

Retrospective Industry AttitudeOverall, respondents recollected feeling more optimistic about the childcare industry in 2015 than in 2016. The shift is particularly noticeable amongst preschools, almost half of whom recalled feeling optimistic in 2015, while just 15% felt negatively and the remainder neutral. In 2016, the number of respondents from preschools who felt negatively had more than doubled, while positivity had shrunk to 34%.

How do you currently feel about the future of the childcare industry in the UK as a whole?


Very negative 2.76% 2.07% 1.20% 1.72% 0.00% 7.79% 2.76%

14.72% 5.52% 21.69% 12.07% 11.76% 24.68% 14.49%

48.16% 46.90% 34.94% 43.10% 44.12% 33.77% 45.47%

26.99% 33.10% 40.96% 32.76% 32.35% 28.57% 29.55%

Very positive 7.36% 12.41% 1.20% 10.34% 11.76% 5.19% 7.72%

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Thinking back to June 2015, how did you feel about the future of the childcare industry in the UK as a whole


Very negative 2.61% 1.38% 0.00% 0.00% 0.00% 5.19% 2.19%

11.20% 9.66% 12.05% 10.34% 2.94% 10.39% 10.68%

43.71% 44.14% 34.94% 37.93% 47.06% 35.06% 42.23%

35.28% 37.93% 43.37% 39.66% 35.29% 37.66% 36.70%

Very positive 7.21% 6.90% 9.64% 12.07% 14.71% 11.69% 8.20%

Individual OutlookConsidering their own businesses’ potential for growth, there is deep pessimism in some quarters, particularly amongst childminders and preschools, more than a third of whom expect their businesses to shrink. Nanny respondents, by comparison, are most likely to believe their business will remain the same in the coming year. Nurseries are divided, with significant numbers in each category. Playgroups and other sessional providers are the most optimistic, with more than half predicting growth in both cases. However, when comparing themselves to the sector as a whole, respondents were more likely to expect no change or indeed growth, suggesting they see themselves as ahead of the game. This is appreciable across the board, but there is a division between preschools and playgroups who appear more likely to foresee growth in their businesses, compared with childminders, nannies and nurseries where the biggest difference is in the large numbers foreseeing no change in their own business, while the industry as a whole shrinks.

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Looking just at the outlook itself however:

How do you anticipate your childcare business changing in the next year?


Significant shrinkage 9.97% 5.52% 12.05% 8.62% 5.88% 11.69% 9.44%

Slight shrinkage 25.77% 14.48% 20.48% 15.52% 20.59% 27.27% 23.16%

No change 36.50% 54.48% 25.30% 15.52% 14.71% 19.48% 34.99%

Slight growth 23.62% 22.07% 27.71% 43.10% 35.29% 36.36% 26.12%

Significant growth 4.14% 3.45% 14.46% 17.24% 23.53% 5.19% 6.29%

Individual AttitudesAt an individual level, attitudes are fairly evenly distributed, broadly in line with the individual business outlook. It is notable however, that there is a more marked tendency for respondents to report their attitude as ‘very positive’ even when they are not necessarily anticipating the highest rates of growth. As is discussed below, this reflects a sector where the spirit of enterprise and entrepreneurship is applied to building a sustainable, long-term business, rather than focussing on a high-flying career. Compared with how respondents felt about the industry as a whole, the tone is notably more positive. The biggest change is in those ranking their attitude at the highest level, while considerably fewer considered themselves to be neutral. There were small increases in negative attitudes too, perhaps reflecting individual difficulties, not attributable to the health of the childcare sector a as a whole. Overall, the picture amongst respondents is very much of an industry that is broadly very happy in its work and feeling positive about the year ahead.

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How you currently feel about the future of your own childcare business or career?


Very negative 5.67% 4.83% 6.02% 0.00% 0.00% 9.09% 5.34%

15.80% 8.28% 16.87% 15.52% 11.76% 20.78% 15.06%

33.44% 26.21% 32.53% 20.69% 26.47% 29.87% 31.17%

28.22% 35.86% 30.12% 39.66% 35.29% 25.97% 30.12%

Very positive 16.87% 24.83% 14.46% 24.14% 26.47% 14.29% 18.30%

Retrospective Individual AttitudeRespondents recollected their attitudes towards their own business or career in 2015 as being different to 2016, but unlike in the industry as a whole where the broad picture is of a more negative attitude today, the scene is more mixed. There were in fact slight increases in the number of respondents ranking their attitude as positively as possible, but there are notable decreases in the number opting for the next rank down.

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Playgroups and other sessional providers in particular report feeling more positive in 2016 than 2015, while childminders and nurseries for the most part report feeing more negative. Overall however, the sector recalls feeling positive both in 2015 and 2016, and although they perceive themselves as overall more pessimistic, the overall attitude is one of resilience.

Thinking back to June 2015, how did you feel about the future of your own childcare business or career?


Very negative 3.07% 1.38% 1.20% 3.45% 5.88% 3.90% 2.86%

8.74% 12.41% 6.02% 8.62% 14.71% 14.29% 9.63%

34.05% 30.34% 33.73% 27.59% 35.29% 16.88% 31.94%

38.34% 40.00% 43.37% 43.10% 26.47% 45.45% 39.37%

Very positive 15.80% 15.86% 15.66% 17.24% 17.65% 19.48% 16.21%

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Career MotivationRespondents were asked to rank several aspects of their work in order of what is most important to them. The results were tabulated and a score determined by multiplying the rank by its frequency of occurrence, to give a final ranking, both overall and by sector.

There appears, on the face of it, to be broad agreement between the different sectors, with every sector ranking job satisfaction first overall while career development was ranked last by all but other sessional providers and nurseries who ranked it second last. There was some slightly more pronounced variation amongst the other categories, most notably professional support, which ranked in second last or last place amongst all but preschools amongst whose respondents placed it third.

However, these ranks were determined using the overall score and present a more uniform picture than was the case. The results are therefore broken down futher in the graphs below.

Rank the following factors in order of importance to your remaining in the industry

Rank the following factors in order of importance to your remaining in the industry

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Pre-school Nursery Nanny Playgroup Childminder Other sessional provider Average

Job satisfaction 1.21 1.26 1.26 1.01 1.45 1.38 1.26

Professional respect 2.56 2.39 2.25 2.51 2.70 2.98 2.56

Job flexibility 3.15 3.22 2.49 2.73 2.18 2.39 2.69

Remuneration 3.20 2.80 2.78 3.36 2.96 2.96 3.01

Professional support 2.62 3.76 4.09 3.45 3.30 3.83 3.51

Career development 4.15 3.61 4.22 3.79 4.45 3.37 3.93

Rank of Aspects of Working in the Childcare Industry

Job SatisfactionJob satisfaction was ranked first by every sector by a significant margin. Although this might be expected in any sector, both inside and outside the childcare industry, it was not the universal top-choice. Of all respondents, playgroups came closest to unanimity, while childminders were most diverse in their opinions, with job flexibility in particular standing out as a main reason to remain in the sector.

Professional RespectProfessional respect ranked in second place amongst everyone but childminders who ranked it third and other sessional providers amongst whom it just came fourth, more-or-less tying with remuneration. This does not necessarily mean that professional respect is not as highly sought-after as in other sectors, but that job flexibility, which in both cases ranks in second place, is a stronger motivator. However, it is important to note that in their comments, childminders frequently complained about having to endure a lack of professional respect from their customers and society.

Job FlexibilityJob flexibility ranked third overall, but experienced a degree of variation, coming fourth amongst nursery and pre-school respondents, third amongst nannies and playgroups and second amongst other sessional providers and childminders. This seems to match the relative degrees of flexibility that these sectors offer, with nurseries and preschools working to long hours out of the home, while playgroups and other sessional providers often work shorter hours and childminders work from their own homes. Nannies experience a great degree of variety in the amount of flexibility their job offers, possibly as variable as individual families, and so their ranking seems to reflect this.

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RemunerationWorking in the childcare sector often commands low pay and so it is unsurprising that remuneration came relatively low down the ranking of what keeps childcare workers in the sector. There was some variation, with preschools ranking it in fifth place, just below job flexibility, and significantly below professional support. Both nurseries and other sessional providers meanwhile rank it in third place, suggesting the possibility of higher pay is a reason why childcare professionals may have chosen those sectors over others.

With remuneration, more than any other aspect perhaps, it is worth noting that the survey could only reach those already in the sector. It cannot be said that significant numbers are not put off childcare due to its low pay.

Professional SupportWith the exception of preschools, professional support was ranked last or second-last overall by every sector. Preschools meanwhile ranked it in a strong third place, only just behind professional respect. This reflects the different nature of the pre-school sector; highly integrated as it is with the education sector in general, it is perhaps an environment in which professional support is more easily sought. Perhaps surprisingly, professional support was ranked in last place amongst respondents from nurseries. Further research would be necessary to establish why this was the case, but it should be noted that the majority of nursery respondents were business owners rather than employees.

Career DevelopmentRespondents ranked career development in last place. Amongst childminders and nannies in particular this is not surprising, as they are usually sole-workers who cannot be promoted, and moreover are limited by regulation in the extent that they can expand. However, it is more surprising to see in nurseries and preschools, where there are more likely to be promotion prospects. These findings may have implications for future workforce strategies. Ensuring that professional respect and flexibility are prioritised may pay dividends, while focussing on access to support and career development, while in principle laudable, may require work to stimulate demand in the first place.

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Professional SupportRespondents were asked where they received the majority of their professional support from and to rank how satisfied they were with it. In interpreting these results, it should be borne in mind both that Morton Michel provides access to professional support to its customers and therefore many of the respondents to this survey. It should also be borne in mind that as many professional associations provide their own insurance, these are likely to be significantly under-represented by the sample.

Local authority No support Private provider Other Employer

Childminder 64.72% 11.50% 8.59% 12.88% 0.15%

Nanny 17.24% 37.24% 28.28% 7.59% 5.52%

Nursery 50.60% 3.61% 25.30% 4.82% 13.25%

Other sessional providers 27.59% 22.41% 22.41% 15.52% 12.07%

Playgroup 55.88% 17.65% 11.76% 5.88% 8.82%

Pre-school 80.52% 5.19% 5.19% 2.60% 6.49%

Grand Total 55.86% 14.78% 13.25% 10.68% 3.34%

Where do you receive the majority of your professional support (such as training and development) from?

Source of SupportThe majority of respondents cited local authorities as the primary provider of their professional support. Significant minorities receive support from private and other providers such as websites. When broken down by sector, nannies’ position outside the regulated childcare sector is reflected in their responses. 37% say they receive no support at all, and just 17% utilise their local authority. By comparison, 65% of childminders receive most of their support from their local authority and just 11.5% say they receive no support at all. Preschools’ dependence on their connection to local education providers is reflected by 80.5% stating they receive most of their professional support from local authorities.

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Quality of Support by SectorThe quality of professional support was rated between middling and very good by the majority of respondents. Broken down by sector, playgroups and other sessional providers were most likely to give a high rating and playgroups were also least likely to give a low rating. Childminders and nannies more or less tied with their dissatisfaction, a third of both sectors giving the support they receive a negative rating. However, more than a third of childminders and nearly a third of nannies rated the support they receive highly, suggesting considerable variation. Preschools, who rate professional support as an important consideration for why they remain in the sector, were in fact not the most positive about the support they receive; less than fifty percent gave one of the higher ratings.

Quality of Support by ProviderAsked about the quality of support they receive, providers were mixed, but broadly more positive than negative. Respondents who receive most of their support from employers rated their support most positively, with nearly two thirds giving a rating of 4 or 5. Those who receive their support from private providers were also likely to be complimentary with more than half rating it 4 or 5. Those whose support mostly comes from other providers, which includes doing their own research through freely available resources such as advice websites, were the most likely to give a low rating, with just over a quarter rating it at 1 or 2.


Very poor 14.42% 19.31% 3.61% 8.62% 5.88% 9.09% 13.25%

15.18% 10.34% 14.46% 10.34% 5.88% 12.99% 13.73%

31.90% 37.93% 28.92% 29.31% 26.47% 32.47% 32.22%

20.55% 18.62% 38.55% 18.97% 35.29% 28.57% 22.69%

Very good 17.94% 13.79% 14.46% 32.76% 26.47% 16.88% 18.11%

Please rate the professional support you receive

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Local authority Employer Private provider Trade association Other

Very poor 4.58% 2.56% 5.10% 0.00% 13.39%

12.77% 7.69% 11.46% 13.04% 14.17%

34.70% 25.64% 31.21% 39.13% 32.28%

26.84% 30.77% 33.12% 34.78% 17.32%

Very good 21.11% 33.33% 19.11% 13.04% 22.83%

Please rate the professional support you receive

Extended Funded Place EntitlementThe survey was undertaken after the Childcare Act 2016 had passed into law in England, paving the way to doubling the amount of free childcare available to working parents. It also took place after the Scottish and Welsh elections, which gave the governing parties an electoral mandate to extend free hours in the devolved administrations.

The survey asked respondents whether they currently offer free provision, and whether they intend to offer the extended provision once it comes in. At the time, little information had been made available about how the policy would be implemented and in particular how it would be funded. This meant there was a great deal of uncertainty in the sector.

Although there are now more details available about the plans for the policy’s implementation in England, and details are emerging from the devolved administrations, no nationwide roll-outs are expected until later this year. These results can therefore be interpreted as an indication of the upper and lower boundaries of capacity in the sector for providing the increased entitlement and where that capacity may lie.

The results are presented by sector, divided into childminders, nurseries, and sessional providers, the latter of which includes playgroups, preschools and other sessional providers.

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ChildmindersSlightly less than half the childminders who responded to the survey currently offer free hours. When asked about the extended entitlement, only 27.5% of childminders said they intended to offer the extended entitlement, 32.5% said they did not intend to do so and 40% said they were unsure.

This suggests a range of possible outcomes. If the policy is poorly handled, considerably fewer childminders may feel able to offer the extended entitlement.

It is not clear at present precisely how much capacity will be needed from childminders. The Westminster government appears to expect childminders’ role in supporting the policy to be focussed on offering parents flexibility. It will be possible to split the extended entitlement between different providers and so it is possible that even if only two thirds as many childminders offer 30 hours as offer 15, this will be enough to meet demand. However, parents who prioritise consistency of care and are not keen on using more than one childcare provider may find it frustrating if there is a dearth of childminders offering the full entitlement.

In their comments at the end of the survey, funding concerns were the most frequent subject raised by childminders, but it was closely followed by concerns about the administrative burden, the level of support available, and the perceived lack of professional respect. These concerns are considered in more detail elsewhere, but the implementation of the extended entitlement may present an opportunity for them to be addressed.

NurseriesThe overwhelming majority of nursery respondents currently offer free hours, while just 5.5% do not. However, only 48.5% say they intend to offer the extended entitlement, while 9.5% say they do not. Even if the remaining 42% who were unsure were to offer the full extended entitlement, this would still be less than the current numbers offering free hours.

Do you currently offer free hours? Do you intend to offer theextended entitlement?

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Do you currently offer free hours? Do you intend to offer theextended entitlement?

These findings are line with recent government concerns that the available capacity amongst nurseries may not rise as quickly as had been anticipated by the policy’s architects. According to Ofsted statistics, childcare providers on non-domestic premises make up the majority of childcare places and a failure in this sector to find the capacity for offering the extended entitlement would be a grave concern.

The extended entitlement was promised during the 2015 and 2016 election campaigns and is consequentially a highly visible and hotly anticipated policy. Parental demand for 30 hours is known to be high, with some settings and local authorities already reporting parents asking for it. Providers are likely to be under considerable pressure to offer the extended entitlement despite misgivings, which could precipitate a crisis if practical measures are not taken to address their concerns.

Three quarters of the comments left on the survey by nursery respondents cited funding as a serious concern, particularly with respect to the free entitlement. Although other issues, such as smaller settings’ capacity, and other changes to the sector were raised, funding was overwhelmingly the issue that respondents believed requires attention. This is in line with other investigations and the findings of the government’s own consultation. Although the funding formula in England has now been published it has yet to be seen whether it will do enough to ensure that sufficient extended entitlement places are offered.

Sessional providersAmongst survey respondents, sessional providers were slightly more likely at 57% to offer the current entitlement than childminders, but 43% do not. When asked about the new entitlement, just 21% said they were intending to offer it, with 30% unsure. Although this pool suggests more than half could potentially offer the new entitlement, it is still somewhat less than provide the current offering. Moreover, 25% say they are in fact unable to offer the new entitlement even if they wanted to.

Sessional providers, by their nature, are able to offer fewer hours in total than the nurseries sector, and some may not be able to offer the full 30 hours per week. As in the case of childminders, the ability for parents to split their entitlement between providers may mean that it will not matter if not all sessional providers are able to offer the additional hours.

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Do you currently offer free hours?

Childminders Nursery Sessional Providers

Do you intend to offer theextended entitlement?

The risk to this sector may come more from being squeezed out between childminders who are free to offer complete flexibility and larger nurseries who can offer extended hours. Alternatively, it may be that these settings, particularly in partnership with childminders who can work on non-domestic premises, could come into their own and offer a flexible service that effectively competes with the more traditional nurseries sector.

As with nurseries, a large number of sessional providers raised funding as a major barrier to their business, with complaints about its perceived inadequacy making up more than half of their comments. Concerns about meeting the national living wage and other statutory financial burdens were raised and may have a disproportionate impact on this sector, which is less able to make economies of scale. These issues could potentially be addressed through a targeted funding system. Extra ServicesTo address any funding shortfall, the government has emphasised that the funding available is for the provision of free childcare and does not need to cover consumables or extras such as yoga classes or trips. Anticipating this, respondents were asked whether they intend to offer extra services, and whether they intended to charge for them. As the survey took place well before the government’s plans were clarified, these results should only be taken as a base-line, rather than current intention.

No Yes, chargable extras Yes, free extras

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Childminder respondents were the least likely to consider offering extra services, whether chargeable or free, followed by sessional providers, while nurseries were the most likely to offer extras. This generally reflects the sizes of the businesses concerned, with childcare providers on non-domestic premises being more likely to be in a position to risk making changes to their business model. Childminders need to rely on the hourly rate they charge and the inherent quality and advantages of the services they provide.

MarketingRespondents were asked to select from a list, how they attract customers to their business. They were allowed to select more than one option. Childminders, nurseries and sessional providers were all provided with the same options, while Nannies selected from a slightly different list to account for their unusual status outside of regulation and contact with local authorities.

In every case, word of mouth proved the most commonly used means of advertising, but perhaps surprisingly it was not universal. Otherwise, there was some variation between the sectors, save that predictably, broadcast media was very uncommon.

ChildmindersChildminders were the most likely sector to select word of mouth, at 91%, as a means of attracting new customers. Third party websites and local authorities came next, at 41% and 37.5%, followed by social media at 29%. Self-marketing via their own website, print media, bulletin boards or broadcasting was comparatively unpopular, together coming to less than social media. This suggests that childminders are keen to take advantage of marketing resources where they are available, but their status as sole-traders means they are often unable to commit to the administration that a complex marketing campaign requires. If they do not want to rely on traditional word of mouth or social media, their success is tied to the ability of third parties or local authorities to do their marketing for them.

Word of Mouth Third Party Website

OwnWebsite

PrintMedia

BulletinBoards

BroadcastMedia

Local Authority

Social Media

Local AuthorityWord of Mouth

Social Media Own WebsiteThird-Party

WebsiteBroadcast

MediaPrint Media

Bulletin Boards

37.58% 91.26% 29.14% 14.42% 42.33% 0.92% 8.44% 3.99%

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NurseriesThe most commonly cited source for nurseries is also word of mouth at 86.5%, but they then rely heavily on their own websites which were cited as a source of customers by 76% of respondents. Local authorities come third at 52%, followed by social media at 42%. More traditional advertising gets a greater showing than with childminders, particularly print media which was cited by 30% of respondents. Third party websites are less popular, being cited by just 25%. Traditional bulletin boards are cited by 13.5% and 5% make use of broadcast media. This suggests that nurseries are less happy putting their advertising in the control of third parties, and have the resources to manage it themselves.

Word of Mouth Own Website

Third PartyWebsite

PrintMedia

BulletinBoards

BroadcastMedia

SocialMedia

Local Authority



WebsiteBroadcast

MediaPrint Media

Bulletin Boards

52.70% 86.49% 41.89% 71.62% 25.68% 5.41% 29.73% 13.51%

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Sessional ProvidersSessional providers were the least likely of the survey’s respondents to say they attract customers through word of mouth, but 71.5% still selected this option. Local authorities, social media and their own websites were important, albeit to a smaller degree than in the case of nurseries. The most notable difference, however, was that sessional providers still make considerable use of bulletin boards, with more than a quarter utilising them. This reflects their frequent location in mixed-use premises, which often offer advertising space to resident providers.

Word of Mouth

Third Party Website

OwnWebsite

PrintMedia

BulletinBoards

Local Authority

Social Media



WebsiteBroadcast

MediaPrint Media

Bulletin Boards

35.75% 71.50% 38.34% 41.97% 21.24% 0.00% 26.94% 27.46%

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NanniesNannies were asked a different question, generally being directly employed whether by parents or a nanny agency; they were asked how they usually find work and were limited to one option. Word of mouth therefore is consequentially unusual compared with other sectors, as is the use of social media or their own websites. Notably 43% of respondents find work through nanny agencies, while third party websites such as Gumtree account for 20%. It should be noted that as the survey was conducted by Morton Michel it was more likely to reach nannies who hold insurance and may therefore not account for a more casual division of the sector.

Sector AnalysisRespondents were each asked a set of questions specific to their sector, according to whether they identified themselves as childminders, nurseries, sessional providers or nannies. They were also given the opportunity to add any comments that they felt were relevant to the survey.

ChildmindersChildminder respondents were asked about two particular policies that have been introduced in their sector in recent years, childminder agencies and childminding on non-domestic premises, in order to gauge the levels of take-up.

Childminder agenciesChildminder Agencies (CMA) were created in 2014 by the then Childcare Minister Liz Truss. Although it has been possible to register as a CMA for more than two years, at the time of writing only 9 exist. The result of this is that individual childminders may not have had the opportunity to sign up with an agency and potential candidates for forming agencies may be unwilling to do so without successful examples to follow. The survey therefore asked respondents how likely they considered themselves to register with a CMA.

Nanny Agency Third Party Website

Social Media

Own Website

Other

Word of Mouth

Employed by a nanny agency

Employed by

Nanny AgencySocial Media Own Website

Third-Party Website

Nanny Agency Word of Mouth Other

10.64% 4.26% 4.26% 21.28% 43.97% 14.18% 1.42%

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How likely are you to registerwith a Childminder Agency?

Do you operate childminding onnon-domestic premises?

For the policy-makers these results are disappointing. Less than 3% of respondents were registered with a CMA and only another 9% said they considered themselves likely to register with one. By comparison, 40% said they would never register and 29% saw it as unlikely. It might be that if there was a concerted effort to revitalise the policy, up to a third of childminders could be convinced to register, and that might change the minds of some who currently list it as unlikely, but it is clear that currently CMAs are somewhat moribund. It is also notable that despite it being a widely-discussed issue in 2014 at the time of its launch, no respondents mentioned CMAs in their comments.

Childminding on non-domestic premisesThe government is keen for the different sectors of the childcare industry to collaborate and for parents to be offered a choice of flexible services. At the close of the Coalition Government, legislation was passed allowing childminders to operate from non-domestic premises (CNDP) for 50% of their time. The policy came into effect in 2016 and continues to be promoted by the government and so the results of this survey should be seen as an early indication of the policy’s penetration.

As with CMAs, CNDP does not appear to be a popular policy among respondents to the survey. It had, however, had very little time to bed-in compared with CMAs and it is possible that those who listed themselves as not intending to offer it will change their minds, particularly if the extended free entitlement changes business practices. However, the example of CMAs stands as a warning that innovative policies that change established systems need leadership and the support of government to succeed.

CommentaryRespondents were invited to leave a comment if they felt there was more they wanted to say about the childcare industry. Although there were some positive comments, the majority detailed concerns about the future of the childcare industry. These can be divided into six broad categories and offer a picture of the concerns underpinning childminders’ attitudes towards their profession.

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FundingThere were significant concerns among respondents that the extended entitlement would be underfunded. Several childminders took issue with the description of funded hours as ‘free’, and suggested that this gives parents an unrealistic expectation about what is possible.

This was the most frequent concern raised in childminders’ comments and is based not only in scepticism about the government’s willingness to fund the new policy but in a strong perception that they are already struggling to make ends meet at current rates.

Concerns raised

RespectMany childminders cited lack of respect as professionals as a major concern. According to respondents who raised the issue, parents frequently do not appreciate the nature of childminding and instead see it as something akin to ‘glorified babysitting’.

This is perceived as particularly unfair in comparison to nursery providers who are in higher esteem. It was suggested by some respondents that changing the name of their profession might help to address this issue.

Ofsted inspections were frequently cited as a source of stress, and concerns raised that their focus is more on school-like teaching than the play-based care that childminders traditionally offer.

Although the survey suggested that remuneration is not the strongest motivator for childminders to remain in the profession, it is apparent from the comments that unsustainably low rates of pay may lead to childminders leaving.

“There is too much pressure from the media to drop our costs, and to offer the funded places. Until these funded places are called “subsidised childcare” rather than “free childcare”, we cannot afford to drop our rate so significantly. [...] In my setting, we offer top quality childcare. We should, therefore, be able to charge for this.”

“There is too much emphasis on paper work such as observations and assessment. Childminding is no longer the satisfying job it was.”

“The childminder sector is still seen as second rate to nurseries and preschools although many of us offer an equivalent or better service and on a much more individual, personal level”

AdministrationChildminders were brought fully into the childcare regulatory regime in 2008, and since then there have been several rounds of changes and updates in the requirements they must comply with. The administrative burden of these requirements was frequently cited as a concern and a potential reason for leaving the profession.

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SupportThere were mixed comments about the support available to childminders, with some concerned that although the support is high quality when available, access is limited. Others stated that their local authority provides very little or no support, or that the quality of support available is very low. There was also a suggestion that support is rationed according to whether a childminder offers funded hours, which some feel unable to do.

CapacityOften linked to funding, some childminders cited concerns with capacity and ratios as a particular concern. The advantage of childminders for many parents is that they can work to a flexible schedule; however, this can be difficult for childminders to manage. Others mentioned that they struggle to cope with inconsistent demand from parents, with some childminders needing to operate lengthy waiting lists.

NurseriesNurseries were asked about the number of Early Years Teacher Status (EYTS) staff they employ as a total of all their staff.

Early Years Teacher StatusEYTS was introduced by the government in 2013 and generally has a positive reputation within the childcare sector, though there is an ongoing campaign to allow those with EYTS to progress to qualified teacher status. The deployment of EYTS staff was varied amongst nursery respondents, with 45% employing none at all. In around a quarter of cases however, those with EYTS accounted for a quarter of all staff, while 7% fell in the top 80% – 100% category.

% of EYTS staff

“Our ratios make it hard to make a living as it seems most people are needing care in a fragmented way, family and friends taking up some of the care giving, so children may come two days a week, this obviously takes up a whole EYFS place which cannot be charged as such.”

“I feel it is very undervalued, we do not get access to the same training or resources as other settings, if you do not offer funding then you are not important enough to get support!”

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Impact of EYTS staff on Ofsted rating

0 1% – 20% 20% – 40% 40% – 60% 60% – 80% 80% – 100%

Requires improvement 0.00% 3.33% 0.00% 0.00% 0.00% 0.00%

Outstanding 6.67% 6.67% 1.67% 1.67% 0.00% 0.00%

Good 38.33% 20.00% 5.00% 10.00% 1.67% 5.00%

The results do not appear to suggest a positive correlation between the number of EYTS staff employed by a setting and the setting’s overall rating. More research would be required to confirm whether this surprising result is truly the case or whether another explanation might account for it. For example, settings are only inspected every six years, which may mean that the impact of EYTS had not been felt at the time they were inspected. There is also the fact that these ratings are only a rough gradation and there may be a considerable difference between those rated at the bottom level of ‘good’ and those at the top.

CommentaryVirtually every substantial comment offered by nursery respondents was on the subject of funding for the extended entitlement of 30 hours free childcare for working parents of 3 & 4 year olds. At the time of the survey, the government had not yet published its funding formula, but a representative sample of the comments left illustrates the challenge facing the policy makers.

Free entitlement fundingSome nursery respondents’ funding concerns related to not just the rate for the extended entitlement but to the existing rate. This has been an issue that the industry has been pressing for some years, and it is only since the conception of the extended entitlement that there has been a serious reaction from the government. The issue for some settings is that the free entitlement is paid at considerably less than they would ordinarily charge parents for a place, meaning that they have to use it as a loss-leader, or not offer it at all. This can mean that nurseries who aspire to offer a deluxe service struggle to compete with settings who can offer free places.

“We closed a nursery at the end of 2015 because of financial reasons associated with the 15 free hours. I cannot see how nurseries can afford to offer 30 hours from 2017. The figures just don’t add up.”

The survey also asked nurseries to give their current Ofsted rating, so that it might be possible to analyse the impact of EYTS on quality.

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Customers’ perceptionsThe promotion of the entitlement to funded hours as ‘free childcare’ was cited as a serious concern by several respondents. There is a strong perception that some parents are unaware that the rates paid do not necessarily match the hourly rates that nurseries would otherwise charge and that this can create unrealistic expectations. Given that charging for extras such as food or nappies is permissible, respondents felt that this would be easier to justify to parents if it was understood that they need to make up for the shortfall.

Sessional providersSessional providers are divided into playgroups, preschools, school clubs and other sessional providers, which include various activity clubs. They operate out of premises in their local communities, which were broken down by the survey. They were also asked to select how many hours a week they operate for, which is relevant to whether they are able to offer the extended entitlement.

PremisesVirtually every substantial comment offered by nursery respondents was on the subject of funding for the extended entitlement of 30 hours free childcare for working parents of 3 & 4 year olds. At the time of the survey, the government had not yet published its funding formula, but a representative sample of the comments left illustrates the challenge facing the policy makers.

Close to half of all respondents operate out of community buildings such as local halls or buildings with function rooms or space available. These multi-use premises are inherently suited to sessional provision but may not be available for extended hours, which could lead to challenges for providers who want to offer the extended entitlement. Similar considerations will apply to places of worship, which account for an additional 7% of respondents.

Schools, which account for 26% of respondents’ premises, may be able to offer space for more time where provision is already offered within school-hours. However, they are unlikely to be able to offer the 6 hours a day necessary outside school hours.

Funding formulasThe Westminster government has now announced that they would curtail top-slicing, the practice whereby the local authorities could determine how much funding provided for childcare they would pass on directly to providers. The rationale for top-slicing is that the free entitlement imposes an administrative burden on local authorities, the costs for which could be met from the funding provided. However, this caused significant regional variation in the amount of money made available. Top slicing was raised as a concern by respondents to the survey, especially if the practice continued after the introduction of the extended entitlement.

“The 30 hr funding will have a huge impact on the industry if the gov do not set the funding hourly rate at a decent level, too much top slicing at county level to fund children services dept will cause too much variation of service across the country. The funding should go straight to front line services, the settings!”

Premises

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Hours of operationThere was considerable variation amongst respondents as to how many hours they offer, but notably only 20% operate for more than 30 hours and so would be able to offer the extended entitlement. This compares to over 75% who can potentially offer the current entitlement if they register to do so.

CommentaryThe majority of comments left by sessional providers came from preschools, however, concerns about the curriculum taught were raised by all provider-types.

StaffingThe difficulties of attracting and retaining staff were discussed by respondents in their comments on the survey. The GCSE qualifications requirement, now abolished following the government’s Workforce Strategy, was identified as restricting the pool to recruit from, but low pay was also identified as a concern.

In the earlier analysis, it was noted that only 57% of respondents currently offer the free entitlement. These responses suggest that it might be possible to increase that number. The difficulty, however, will be for settings who currently operate for more than the current entitlement but less than 30 hours a week, who account for 56% of the total number of providers. They may struggle to retain parents who will have the option of spending an additional 15 free hours with another provider.

Business sustainabilityIn common with nurseries and childminders, funding was frequently discussed by respondents. Their particular concerns centred not just on the funding rate, but on the sustainability of their obligations to meet other requirements such as the minimum wage and pension requirements. Although limited hours means that the minimum wage’s exponential burden is smaller than it would otherwise have been, their potential income is inherently lower and there is a limit to the number of additional costs that can be borne. Scepticism was expressed about the viability of government suggestions such as employing fewer staff so as to work closer to the minimum permitted staff/child ratios.

Hours of operation per week

“We are lacking in good quality staff now due to recent changes in training, so I am finding most settings are finding it difficult to employ. Also due to low pay staff are training and then leaving to go to schools for better pay.”

“Underfunding of the supposedly “free” offer is crippling private providers who have had to meet the costs of providing pension contributions, the introduction of the living wage and minimum wage increases. Government “advice” to cut staffing levels is unrealistic and results in poorer outcomes for children.”

The problem, particularly amongst preschools, of staff training with them and then leaving to work in primary schools with higher levels of pay and professional recognition, are felt acutely. Remuneration and a clear career path are suggested as possible solutions to the issue.

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While the importance of providing quality education is repeatedly acknowledged, there is a strong sentiment that childcare should not become simply an extension of the school system, but maintain its own character. This view was expressed both by playgroups and preschools.

NanniesNannies work in the homes of the children in their care, and are currently not subject to compulsory registration. This sector is less visible than the remainder of the childcare industry, but must be included in any full picture of childcare in the UK. The survey sought to establish the basics of nannies’ working patterns, along with their level of qualification. As has been the case throughout it should be born in mind that the sample reached by Morton Michel is likely to be the more professionalised end of the nannying business.

Households employed byThe majority of nanny respondents work in just one household, looking after the children of a single family. This follows the traditional model for nannies, being considered almost an addition to the family unit. However, 90% of the nannies surveyed do not live with the family. Of those who work in multiple homes, the majority work for two households with just 6% working for more than two.

Number of households Place of residence

The significance of working in more than one household is that these nannies may be self-employed, rather than employed by parents. These accounted for 7% of the total surveyed.

Children cared forThe number of children cared for by nannies varies considerably, but for the most part they do not tend to care for only children, who account for just 4% of the respondents. Roughly even numbers care for two or three children, while those caring for more than three account for approximately a quarter of the total, and 10% care for five or more.

CurriculumSeveral comments expressed concern at what they perceived as an increasingly school-like atmosphere in the childcare sector. This is seen as being imposed by government requirements enforced through Ofsted inspections.

“The Government should leave it to the professionals to decide the curriculum and how children will develop”

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Number of children cared for

Qualifications

QualificationsDespite nannies not being subject to compulsory registration, respondents were frequently well qualified. 41% hold a level 3 childcare diploma, while more than 10% hold a relevant degree-level qualification. However, almost 25% reported holding no qualifications at all. When asked when they last underwent any training, 91% reported that they had done so within the last three years.

RegulationNannies are the only remaining sector of the childcare industry that remains largely unregulated. According to the comments received, for some nannies this has left them feeling like they are under-appreciated for the work they do, and vulnerable to being undercut by less qualified competitors offering a cheaper service. Contrasting views were also expressed, with some nannies having previously worked in a regulated environment valuing the freedom from Ofsted that nannying offers them. However, many feel that the nature of the work they do is unsuitable for casual employment.

“Feel invisible lack of regulation and under cutting debases those who have worked in the industry, who are above board and are not out to make easy money. This kind of work is not easy and requires dedication.

CommentaryComparatively few nannies left comments when invited to, but of those that were left, three issues were raised.

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EarningsIn common with the rest of the childcare industry, several nannies raised their earning potential as an issue of concern. In particular, this was linked to the lack of potential for career progression, with nannies who have years or decades of experience finding that their salaries remain static. Although some nannies may become sought-after and able to work for high net worth families, there are very few who are able to pay a significant fulltime salary.

Child welfareAlthough outside regulation, nannies are in direct competition with the regulated childcare market. Some see this as a good thing, as it raises awareness of the need for professional qualifications and training. However, although some unsuitable nannies may be driven out of the sector, the risk remains that those who are willing to work for low wages may be doing so without the skills and experience necessary to ensure the welfare of children in their care.

“I personally think that the childcare sector will always thrive, there will always be a need for childcare. However, with more and more awareness of the need of qualifications and knowledge of health and safety, I think/hope it will become more difficult for unsuitable people to get jobs in this sector, which will, in turn protect the welfare of children.”

“There seems to be a dreadful cap on earnings for nannies, even those with over 20 yrs experience.”

Documents

Childcare Annual Survey 2017 · 3 Morton Michel Annual Survey 2017 Executive Summary Morton Michel’s childcare survey was conducted between 1st August and 2nd October 2016. 1,523