Introduction

Equitable access to childcare in the UK is largely choreographed by a dominant pay-as-you-go private market, which is now categorised as mature in macroeconomic terms. This chapter concentrates on pertinent issues for childcare providers in sustaining their businesses within a changing economic and socioeconomic demand climate post-maturity. Such concerns are unlikely to centre on equity issues, the topic of this volume, but the sustenance of the private childcare market in the future will crucially highlight the incidence of equity for consumers. Gaining an insight into economic factors determining the likely future of this market should be helpful to the analysis and formulation of wider early childhood education and care policy both in the UK and elsewhere.

Laing & Buisson is a market research company that provides annual reports on the childcare nursery market in the UK using its own survey material as well as government statistical information, in particular Office of National Statistics databases (ONS, 2011a). This chapter draws on the reports to give an overview of market trends, and to make predictions for the future under a new government in a depressed economic climate. The data cited here are taken from these annual reports, in particular the 2011 report, unless otherwise stated.

In 2006 demand for daycare nursery services in the UK (number of children attending) failed to grow for the first time on record and during the following year day nursery supply growth (places available) ground to a halt, following growth which averaged double figures annually in the previous five years (2002–06 inclusive). This was the first sign that the UK's largest paid childcare market had reached a level of maturity; a mature market is one where demand and supply has reached an equilibrium characterised by the absence of significant growth or innovation. Trends since reveal market contraction, as supply and demand both fell by over 6% overall during 2008–10 inclusive (Laing & Buisson, 2011). While this contraction was not unexpected during a period of economic recession which saw the UK economy shrink by 5% in real terms in 2009, it was at the same time consistent with market maturity.