Hundreds of early childhood centres are closing their doors each year. Photo / File
In two years 285 early learning centres around the country have closed their doors - a figure described as “deeply worrying” by an industry representative.
Figures released by the Early Childhood Council (ECC) today showed 91 centres had shut down between July 2022 and the present - less than 10 months.
Ministry of Education figures show the number of closures slowly gathering speed with 147 centres closing down in the 2022 calendar year and 138 closing during 2021. In 2020, about 110 centres shut down.
“The average centre enrolled about 41 children, meaning that over 3700 children and families lost their chosen early learning option with these 91 centre closures in the year to date. New Zealand is rapidly losing its diversity of choice,” ECC chief executive Simon Laube said of the closures during the last 10 months.
“These closures are deeply worrying and show a worsening trend – we do not have a thriving early learning sector.”
Office of Early Childhood Education chief advisor Dr Sarah Alexander said that while the number of closures might seem high, there were 4500 early childhood education centres in New Zealand.
“That’s actually quite a small proportion to close. In the meantime, we’ve also had new services opening,” she said.
Alexander said, for the most part, there were other nearby centres parents could enrol their children in if a service closed down.
There was an undersupply in some areas but the Ministry of Education’s new Network Management Service was ensuring new centres were opening in areas where there was demand, she said.
The ECC said it was generally in new subdivisions and rural areas where parents had trouble finding care when a centre closed down.
Laube believed a large part of the reason was the Government’s pay parity scheme which centres could opt-in to.
Centres who did opt-in were provided extra funding to cover the salary increases but in many cases, especially smaller centres with a lot of experienced staff, the increase was not enough meaning centres were being forced to increase fees to cover the shortfall.
But, data from the Ministry of Education showed that of the centres that closed in 2022, “owner retired/disestablished” was given as the reason for 50 centre closures, 49 closed because of declining rolls, 18 shut because the Ministry of Education withdrew their licence due to non-compliance and 11 closed for financial reasons.
Both Alexander and Laube agreed that part of the reason for declining rolls were the Covid lockdowns which had seen many parents continue to work from home while caring for their children.
Alexander said the oversupply of services in some areas or a reduction in children in the area were also reasons for declining rolls.
Cost was also likely a factor given daycare costs in New Zealand have risen 12.8 per cent in the last five years with more than a third of that increase coming in the last year.
Alexander said, after struggling to stay afloat during Covid lockdowns, some owners had decided to either retire or change careers.
“Coming out of Covid a number of service providers were saying, ‘Life’s too short. I’m going to do something else’.”
Each year there were also a number of providers who had their licence to operate removed by the Ministry of Education for breaching minimum standards - usually in health and safety or in claiming funding they were not entitled to.
While the number of people listing finances as the reason was small, it was a real issue for some centres, Alexander said.
She said many types of businesses were struggling in the current economic climate and childcare was no different.
The nationwide labour shortage was a problem in early learning also, as were demands for higher pay to cope with the cost of living increases, she said.
When it came to finances, Laube said it was the centres that did not or could not rely on fees that were worst affected. He said the Ministry of Education needed to “wake up” and take “urgent action”.
Kids At Play owner Fiona Frewin said she tried charging parents at her three rural services but found enrollments dropped 40 per cent because they were in a low socio-economic area.
They changed back to free and occupancy climbed right back to 90 per cent again.
Frewin said introducing pay parity as it was now funded would mean charging parents as much as $800 a week.
“Nobody can afford that,” she said. “But in saying that, the children didn’t go anywhere else. The low socio-economic area, it’s really hard because if you don’t have the funding, the centre won’t survive.
“Unless we get the funding amount right for these small centres, they won’t be here.”