The annual Childcare and Early Years Providers survey found that full daycare and sessional providers had the highest loss-making levels since the survey began in 2001.
Full daycare and sessional providers showed an increase in the proportion of settings operating at a loss, up from 13 per cent in 2009 to 19 per cent in 2010 for full daycare, and up from 15 per cent to 20 per cent for sessional care.
The Department for Education commissioned TNS-BMRB to carry out the survey, which is based on telephone interviews with providers between September and December 2010.
The survey also found that compared with 2009, settings in deprived areas are finding it harder to cope financially than those in other parts of the country.
In 2009, the proportion of full daycare, sessional and holiday clubs operating at a loss was similar in the 30 per cent most deprived areas and in the 70 per cent less deprived.
However, in 2010, ‘For all of these providers, the proportion of loss-making settings in the most deprived areas had become significantly higher than the proportion in the least deprived areas.
‘This would seem to indicate that providers in the less affluent areas are finding it harder to weather the difficult economic conditions than those in better off areas,’ the report says.
Meanwhile, the number of children in early years and childcare settings has risen by nine per cent in the past year.
However, vacancy rates have gone up across all providers. In 2010 there were an estimated 440,800 vacancies for all types of provider, but the researchers said this could be partly due to an increase in recorded settings in 2010.
The report said, 'As each setting will have a number of vacancies, it follows that if more settings are recorded then the estimated number of vacancies will also increase. As such, the more telling aspects to focus on are the average number of vacancies per setting and the proportion of the total available that are vacant for each type of provider.'
Around a quarter of vacancies, (28 per cent), were in full daycare settings, where there were 122,700 vacancies. This is the equivalent of eight vacancies for each daycare setting.
The figures also reveal that the number of childminders actively caring for children in 2010 was 47,400 – a 7 per cent decrease on the previous year’s figures.
Ofsted’s data shows that there were 2010 childminders registered at the start of the year, but as in previous years, a substantial minority (18 per cent) were not actively working as childminders.
The report says, ‘The decline in the number of providers reflects a trend that predates the recession and, as such, would seem to be due to broader market factors and issues of parental preference, rather than directly caused by financial issues.’
The research also shows that qualification levels for early years and childcare staff are rising, with ‘a substantial increase’ in the number of staff qualified to a minimum of level 3, since 2007.
Qualification levels tended to be higher in early years settings (which the survey defines as nursery schools, nursery and reception classes in schools, and primary schools with reception but no nursery classes).
However, the report said that the 'childcare sector is closing the gap’ in this respect.
In 2010, 76 per cent of staff in group-based childcare settings held a relevant level 3 qualification, up from 65 per cent in 2007.
Just under one in ten staff in group-based childcare held a level 6 qualification.
