September early years funding will be based on pre-Covid occupancy to protect the sector

Children and families minister Vicky Ford said that funding nurseries and childminders based on the level they would have been funded before Covid-19 would give them security and offer them longer protection to recover.

Nurseries and childminders are suffering financial losses from the impact of the pandemic, as far fewer children have returned to settings since they were allowed to open more widely from 1 June, as lockdown eased.

According to official Government statistics, only around a quarter of children are attending early years settings than would usually attend in term-time.

The Department for Education has updated guidance for local authorities advising them as to how they should fund nurseries, childminders and pre-schools from September.

This states that free entitlement funding for the 2020 autumn term will be based on the January 2020 census count (not on January 2021) due to the exceptional circumstances caused by the coronavirus outbreak.

The guidance states that:

• The final Early Years Dedicated Schools Grant (DSG) funding allocations for the autumn term 2020 will be based on the January 2020 census, rather than updated using the January 2021 census count as would have been usual.
• To achieve this, the DfE will fund local authorities for the childcare places they would normally have delivered, and expect them to pass that on to providers.
• Local authorities should only fund closed providers if they are closed for public health reasons.

Minister for children and families, Vicky Ford, said, ‘Nurseries, childminders and pre-schools, who have provided crucial support throughout the pandemic, are now more vital than ever as hard working families begin returning to work. 

‘We want to provide security to nurseries and childminders that are open to the children who need them. That is why we’re funding childcare at the level we would have funded before coronavirus until the end of the year – regardless of whether fewer children are attending. This will offer protection over a longer period for the sector from the impact of the Covid-19 outbreak.  

‘Early years settings will continue to benefit from a planned £3.6 billion funding in 2020-21 to create free early education and childcare places for children.'

While sector organsiations welcomed the announcement, they urged the Government to follow it up with urgent transitional funding, similar to that which has been recently announced in Scotland.

Last week the Scottish Government pledged £11.2m to help childcare providers recover from the pandemic and pay for extra costs, such as cleaning.

Neil Leitch, chief executive of the Early Years Alliance, said, ‘We welcome today's announcement on free entitlement funding as a step in the right direction. However, let us be clear that this on its own, will do little to ease the concerns of thousands of providers who fear closure in twelve months’ time. 

‘For weeks now, we have been calling on the Government to provide the urgent transitional funding the sector desperately needs to survive and today's decision, while positive, can be no substitute for that. 

‘We urge the Government to follow up today's announcement with a commitment to providing the sector with the short-term funding it desperately needs. Without it, the sobering reality is that thousands more nurseries, pre-schools and childminders will face no choice but to close their doors for good.’

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said, ‘This is a positive announcement for providers giving some level of certainty for the coming months. Many of our members have been concerned about their ability to remain open with reduced attendance and increased operating costs to operate safely. The uncertainty about funding from September was causing real concerns.

‘The announcement is about funding that had already been pledged for the sector and doesn’t address long-term concerns of underfunding. It still won’t help providers meet the extra costs they are facing as they work to keep children and staff safe. In Scotland we’ve seen the Government there announce transitionary support to the childcare sector and we need to see some more support for childcare providers in England too.

‘The prime minister has talked about levelling up the country and getting people back to work. If we put the child at the heart of policy decisions we would see that levelling up take place with investment in the early years. And if the Government is serious about its Plan for Jobs we need to see a plan for childcare to support working families.’

Liz Bayram, PACEY chief executive, said, 'Any help is to be welcomed and this continuation means providers adversely affected by future local lockdowns will still receive some support until January.

'However, we remain concerned that if the number of children attending doesn’t increase soon then we are at real risk of significant closures, particularly as furlough support ends both for childcare providers and, of course, for some working parents. We still need long term sustainable funding and clarity around how providers will be supported through future local lockdowns, if they continue into 2021.'