Impact of the COVID-19 pandemic on the sustainability of the pre-school sector, House of Lords, 8 June 2020

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.


Key messages

  • Effective, high quality early years provision makes a difference to young children, helping to break the cycle of disadvantage, improving social mobility and offering them a good start in life. Early years providers have stepped in to provide care for vulnerable children and the children of critical workers, to help deal with the COVID-19 crisis. 
  • 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.
  • Current funding arrangements for many private, voluntary and independent early years settings only cover around half of their normal income, and even with additional support such as the business rates holiday, in many cases it is more financially sustainable for settings to close so they can access funding to furlough their staff. This is significantly affecting the sufficiency of early years spaces, with almost two thirds of providers closing  leading to reports of critical workers and vulnerable families struggling to find suitable childcare.The Government must act urgently to ensure that early years providers are fully compensated for remaining open and that no early years provider is operating at a loss in order to deliver the government’s childcare commitments. The Government must also ensure that there is enough money to support providers who are closed to make sure there are sufficient childcare spaces when the current crisis ends.
  • Councils want to work to get children back to early years settings as soon as possible. We are however, conscious that social distancing will not be possible in early years settings due to the age of children and the play-based approach to learning. The Department for Education (DfE) guidance must clearly outline health and safety measures and the science supporting wider opening of settings in an accessible manner to reassure staff and parents.

Download the full briefing