I don't know that the Sun is an appropriate source of factual, balanced information. Did they "ban" Xmas or choose not to celebrate it? Would it as sensational if the nursery opted not to celebrate Ramadan? As an educational establishment, I'd imagine the obligation is to teach the children about how different cultures celebrate different cultural/religious occasions, without overtly celebrating one event or another.
Educating the children about what Christmas represents to many is, apparently, what they have failed to do, and this is the basis of the complaint that was upheld (lack of cultural diversity).
On the issue of "unvetted staff", CRB checks and references aren't instant - so long as new staff are in the process of being vetted and are never left unsupervised, I would not necessarily be concerned, in fact, would go so far as to say this was "normal".
I'd make your own enquiries and then decide based on informed facts, not sensationalist tabloid journalism. The nursery may well be crap, but I think you need to make that decision based on more balanced evidence.