Coronavirus: future of early years providers uncertain without funding commitment

Additional funding is needed to support all early years providers for the period of the coronavirus crisis if enough childcare places are to be available for families who need them.


Toddler playing in a sandbox

The LGA said councils want to work with government to get the country moving again and have a unique opportunity to reset early years, ensuring that they are adequately funded and staff are trained to the highest level.

More than 69,000 early years providers have temporarily closed during the coronavirus pandemic, with many settings citing financial difficulties as a key reason.

Among those that have remained open, many are operating at a loss.

Early years settings have been asked to provide the same support to vulnerable children and key workers as schools, but while schools are fully funded, early years settings are not because much of their income comes from paid parent fees. These fees have fallen dramatically as most parents have kept their children at home.

While early years settings can potentially open to all children from 1 June, providers are concerned that many parents will choose to keep children at home due to concerns over COVID-19. This will mean that they struggle to bring in the parent paid fees that they need to continue operating, risking redundancies or closures of settings, and a loss of the skilled and passionate staff that provide essential support to children.

Despite government funding for free early entitlements, councils are concerned that this alone is not enough to ensure providers can remain open without operating at a loss, while also supporting closed providers to ensure there are enough spaces for all children.

Councils also say the Government’s advice to early years settings around finance has been inconsistent, including changes to furlough advice and the use of the Dedicated Schools Grant.

This has made it very hard for settings to make informed business decisions while some early years settings have also struggled to access business support offered by the Government, placing further pressures on their finances.

Councils are ready to lead COVID-19 recovery efforts with early years providers to ensure every child has the best start to life and leaves early years settings ready for school.  As settings are asked to open to more children from 1 June, it is vital they have the resources to do so to prevent children from falling behind and missing out on key development opportunities.

Cllr Judith Blake, Chair of the LGA’s Children and Young People Board, said:

“Childcare providers have been a vital part of the nation’s response to coronavirus and councils have been working closely with them to ensure that vulnerable children and critical workers have the childcare they need. 

“While providers have been asked to step up in the same way that schools have, their costs have not been covered in the same way.

“These problems will not go away from 1 June as social distancing guidelines means that group sizes will need to be smaller and parents are needing to be reassured about the safety of sending their children to childcare.

“Having enough childcare places will be essential to support families and get the economy moving again as emergency measures are eased. It is therefore vital that the Government urgently provides additional funding at a national level to ensure early years providers can remain open.”

Notes

  • Coronavirus Job Retention Scheme: Around two thirds of early years providers took the decision to close shortly after people were advised to stay at home. The Department for Education guidance was updated to state that the scheme could only be accessed for the proportion of the paybill that could be said to be funded from private income.
     
  • The Dedicated Schools Grant was issued on Wednesday 22 April highlighting that councils have flexibility to move DSG funding from closed providers to open ones where this is needed to ensure sufficiency in a local area. While flexibility to meet local need is, of course, always welcome, councils are concerned that this goes against earlier statements that councils should pass through all DSG as normal to providers. This has caused further concern amongst providers, who as above made business decisions based on earlier advice.