Nurseries are facing increasing competition from informal childcare, as parents turn to friends and relatives to look after their children.
Speaking at the National Day Nurseries Association conference, Laing and Buisson economist Philip Blackburn advised delegates that price is key to the survival of formal childcare over the next ten years, as financial pressure leads to more parents opting for informal over formal childcare. He said, 'Prices need to be kept to a minimum, and nurseries should keep a lid on inflation on wages.’
According to the economist, who revealed the latest trends in the childcare market, ahead of the full publication of Laing and Buisson’s annual report next month, over half of households use family and friends for childcare services, with the average use of ten hours a week.
He said, ‘Informal childcare is already a giant sector. It’s likely to become a larger figure as more flexible working practices mean that parents and grandparents are going to be able to provide more hours.’
In response to a question from delegate Linda Duly, director of Cuddles Nursery Day Nursery in Poole, Dorset, who asked why she shouldn’t put up her fees to pay her staff more, Mr Blackburn said that it was fine if she could generate demand, but warned that if all nurseries did this the whole market could collapse.
The economist also revealed that figures from Laing and Buisson's annual report for 2011, show the weekly price of childcare has not increased in real terms, whereas supply of places has increased by 60 per cent since 2002, and demand for places or occupancy has grown by 38 per cent.
However on a more positive note, Mr Blackburn said nurseries would benefit from a rising under-fives’ population, set to continue until 2020, and a higher average birth rate.
He also claimed that men and women will have to work more hours and for longer to subsidise the growing elderly population, which he said was really good news for the childcare market.
According to the economist, who revealed the latest trends in the childcare market, ahead of the full publication of Laing and Buisson’s annual report next month, over half of households use family and friends for childcare services, with the average use of ten hours a week.
He said, ‘Informal childcare is already a giant sector. It’s likely to become a larger figure as more flexible working practices mean that parents and grandparents are going to be able to provide more hours.’
In response to a question from delegate Linda Duly, director of Cuddles Nursery Day Nursery in Poole, Dorset, who asked why she shouldn’t put up her fees to pay her staff more, Mr Blackburn said that it was fine if she could generate demand, but warned that if all nurseries did this the whole market could collapse.
The economist also revealed that figures from Laing and Buisson's annual report for 2011, show the weekly price of childcare has not increased in real terms, whereas supply of places has increased by 60 per cent since 2002, and demand for places or occupancy has grown by 38 per cent.
However on a more positive note, Mr Blackburn said nurseries would benefit from a rising under-fives’ population, set to continue until 2020, and a higher average birth rate.
He also claimed that men and women will have to work more hours and for longer to subsidise the growing elderly population, which he said was really good news for the childcare market.
