England’s remaining state nursery schools are being driven towards extinction by budget pressures and uncertainty over future government funding, according to a survey of the sector’s financial position.

A third of the maintained nursery schools – which offer pre-school provision through local authorities – said they were having to cut staff and services, including reducing opening hours, because of falling income and higher costs since the start of the Covid-19 pandemic.

“Maintained nursery schools during the pandemic were a lifeline for local families. They stayed open for the most vulnerable children and children of critical workers, often taking in children from other settings that closed,” said Beatrice Merrick, the chief executive of Early Education, which represents the sector.

“Instead of this lifeline being supported, it is being put at risk by government failure to address their routine funding needs.”

The survey, by Early Education and the sector’s leading unions, including Unison and the National Education Union, found nursery schools were losing an average of £76,000 in annual income and having to spend an extra £8,000 in costs directly related to Covid-19.

Almost half of the 200 maintained nurseries across 75 local authorities said they would be running deficits for the financial year, and only one in four said they could continue to operate with current funding. One in five reported they had emergency financial recovery plans in place or under discussion.

Cathy Earley, the head of Greenacre community school in Sefton, near Bootle in north-west England, said the lockdown had meant her nursery school lost income from fees for paid childcare it had previously been able to offer, while it also lost income from having few new children signed up for government-funded places during the pandemic.

Earley said that, during lockdown, nursery schools were treated as other schools in England, having to remain open for the children of critical workers or vulnerable children, but were not given any of the extra funding that primary or secondary schools received. They also were not eligible for the tax rebates or interest-free loans available to private daycare providers.

Nursery schools provide state-funded childcare up to the age of five, and often include dedicated provision for special needs or disabilities that are not available in the private sector. Only 389 maintained nursery schools remain in England, with many based in deprived areas, looking after 40,000 children.

“Many maintained nursery schools were in a perilous financial position even before the pandemic but the last year has only deepened that crisis and they have now been pushed to the very brink,” said Paul Whiteman, the general secretary of the National Association of Head Teachers.

“If we are to avoid widespread nursery closures, the government must urgently come forward with a long-term solution.”