Following the first national lockdown and through the Autumn term 2020, the Government said that settings would continue to receive their early years entitlements funding, even if they closed. However, this funding only covers around half of a private nursery’s costs with the remaining derived largely from parent fees, which have clearly been significantly cut as most children stay at home. Around two thirds of private nurseries closed temporarily as a result, while those that remain open are struggling financially, with some operating at a loss.
In light of the latest national lockdown, early years providers have been requested to stay open whilst school premises are closed to those apart from key worker and vulnerable children. We fully recognise the importance of early years provision to ensure that parents have access to good quality childcare to enable them to work and that children have the support they need to develop school readiness. However, we need assurance that this is safe for children, families and staff and the early years sector needs to be effectively resourced. The announcement before Christmas of the return to routine funding arrangements (‘funding following the child’) has caused significant difficulty for local authorities and providers in light of the national lockdown.
We need to keep a close eye on the attendance numbers at early years settings, and if these look to fall, the funding approach laid out before Christmas needs to be revisited otherwise the sector is at significant risk. The Government should ensure that no provider is operating at a loss in order to deliver the government’s childcare commitments, and that we have enough money to support providers who are closed to make sure we have enough childcare spaces when we need them.
We have repeatedly raised concerns about the underfunding of the early entitlements, so it was good that extra funding was announced in the recent Spending Review. However, with many early years providers struggling due to COVID-19, it was disappointing that this was not a more significant and immediate investment to support providers during this unprecedented time.
Even without the additional pressures of COVID-19, low funding rates result in low pay for childcare workers, with almost half (45 per cent) of childcare workers also claiming state benefits and childcare workers earning around 40 per cent less than the average female worker. This in turn is resulting in a recruitment and retention crisis in the sector, in particular for well qualified staff. This fails to recognise the vital work that childcare workers do and the significant contribution they make to the future life chances of all children.
It is crucial we retain the good quality early education and childcare that improves children’s outcomes and reduces the disadvantage gap. Given a recent report from Coram states that 58 per cent of local authorities think that local childcare providers may close for good, immediate investment and clarity about future funding arrangements is needed.