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Thousands of new childminders at risk of closure without Government support

Newly registered childminders around the country feel they are missing out on vital Government support for the self-employed, and fear their businesses will fold in the crisis.

Childminders are among those who will miss out on the Government’s financial support package for the self-employed if they have been working for less than a year.

Businesses set up within the last financial year are not entitled to any support from the Self Employment Income Support Scheme, announced by the Chancellor Rishi Sunak last week. Your self-employed trading profits must also be less than £50,000 and more than half of your income must come from self-employment.

The package of support will not be available until the beginning of June. In the interim, childminding businesses will be able to apply for a business interruption loan, which has been extended to the self-employed and universal credit.

However, many families will not be able to claim universal credit because their partner works.

This scheme will allow self-employed individuals to claim a taxable grant worth 80 per cent of their trading profits up to a maximum of £2,500 per month for the next three months. The Government has said this may be extended if needed.

Those businesses that have been operating for fewer than three years will also receive less than the 80 per cent.

Gill who contacted Nursery World, is a new childminder who is not eligible for the Government self-employed scheme.

She told us, ‘I left employment last year to follow my passion and start up a childminding business. Started my business in January and have been making in excess of £1,000 per month, growing month to month. 

‘Things were going great. I now am in the position that because I have only been trading for three months before the outbreak I have no support. 

‘I know the Government have said universal credit will be an option but my partner works. 

‘I have applied but from all the research I have found, it looks like I wouldn't get any support. This would mean I wouldn't be entitled to anything.

‘I have been offered key workers’ children to care for, but I have two young ones myself and want to protect them from this virus. I am not looking for hand outs and have always been willing to work. I just find this very harsh that there is all this support for other self employed people and employees but I seem to fall into the gap that has been missed.’

According to the Professional Association for Childcare and Early Years (PACEY) around 2,000 new childminders will not qualify for the scheme.

PACEY chief executive Liz Bayram said, ‘While we are grateful that some childminders will get support in June, there is still a huge potential risk of the immediate loss of thousands of childminders, not least the 2,000 plus newly registered childminders, most of whom won’t qualify for the current Self Employment Income Support Scheme offered.

‘We welcomed the opportunity to submit further evidence to the Treasury Select Committee where we raised a number of concerns including the delay until June for payments, exclusions of sole traders with no tax return for the 18/19 tax year and the fact that most who are recently self-employed or a limited company are missing out.

‘PACEY is continuing to urge Government to understand the support that childcare providers need, so that there is a strong early years and childcare sector that families can continue to rely on when we are able to return to our normal working lives.’

 

Petition

Childcare platform, Yoopies, says it has spoken to more than 300 childminders, and has heard of heightened anxiety, financial dependence on the goodwill of parents and forced business closures.

It has launched a petition calling for the Government to open the scheme up to all self-employed workers, regardless of when they started working.

Yoopies said, ‘If the Government continues to let childminders to fall through the cracks of Government support, we risk a childcare crisis by the end of the quarantine.' 

It is urging the Government to reassess the scheme to better protect childminders and other self-employed workers during this difficult time. 'Workers should be able use invoices to prove projected incomes where tax declarations have not yet been submitted.

'We can imagine that this situation is similar across other industries which rely on self-employed individuals. We are calling for the Government to ensure alternative options are sufficient enough for all self-employed workers and childminders to be able to manage through this period.'

Gaps in the scheme

Yoopies also points out that the grant is calculated on profits rather than income. The childminding profession in particular is an activity that yields high operating costs, and as such lower profits than other self-employed professions. 

Many of the deductible expenses incurred by childminders during their work are costs that need to be paid regardless of whether they are taking care of children, such as rents and utilities. It said the Government should reassess this part of the scheme to consider these unavoidable costs.

‘We have spoken to many childminders who say that the grants they would be entitled to (if any) wouldn’t be enough to cover their rents and bills. Some are ineligible for universal credit, and either need to rely on families’ goodwill to cover a portion of their fees even if the child is not being looked after, or seek alternative employment in an already difficult situation.’

As childminder Debbie said on the petition site, 'I am an Ofsted registered childminder and the 80% will only just cover half of my rent. Let alone any other bills and food. Childminders are able to deduct 10 per cent wear and tear and a percentage of utilities, rent and car costs as expenses, plus food for the children we feed and resources, trips etc. This is why our net income is much lower than other self employed people.'