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Future of early years providers uncertain

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Written by: Emma Lunn
28/05/2020
Additional funding is needed to support all nurseries and childcare providers throughout the coronavirus pandemic.

The Local Government Association (LGA) has warned that childcare providers need more money if enough childcare places are to be available for families who need them.

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.

The LGA says early years providers 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 providers 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 centres.

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. Some early years providers have also struggled to access business support offered by the Government, placing further pressures on their finances.

Judith Blake, chair of the LGA’s Children and Young People Board, says: “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.”

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