Nurseries to write off childcare debts from parents

More and more nurseries are struggling to recover those childcare debts

More nurseries in the last months are having to write off childcare debts, as they are struggling to recover the debts from unpaid fees.

According to a recent survey carried out by Parenta, it revealed that 54 per cent of those who responded to the survey have had to write off unpaid fees in the last 12 months.

Amounts outstanding have ranged from a £150 to the highest being £12000. Majority of providers have a system in place to chase any money owed, ones who had to write of  thousands of pounds of debt had a more lenient approach to late fees.

It best practice to have a very strong clear debt management system in place, this system may be the answer to whether nurseries make a profit or a loss.

Having to write of childcare debts can only add to the stress of already losing money from the underfunding of the free entitlement, this has lead to most nurseries having to increase fees to subside the cost.

There were more than 100 responses to the survey the majority taking part identifying as an independent nursery, pre-school or day care centre, 19 per cent part of a chain, and 2 per cent were childminders.

Allan Presland, managing director of Parenta, said, ‘Given the precarious financial situation that many nurseries now face, it’s shocking that more than half of the providers we asked have had to write off bad debts in the past 12 months. It’s even more unsettling to realise that this debt averages £2,991.

‘Undoubtedly, the sector is at a precipice. With 40 per cent of nurseries not expecting to make a profit this year, a funding crisis is looming. The Government must enable sustainability for the sector by ensuring that the 30 hours of free childcare are adequately funded, if we want a thriving childcare sector.’