Coronavirus: Councils call for more funding for settings to remain open

More than 69,000 early years providers have temporarily closed during the pandemic, with many settings citing financial difficulties as a key reason. Among those that have remained open, many are operating at a loss.

While early years settings can potentially open to all children from 1 June, providers fear that many parents will choose to keep children at home due to concerns over Covid-19.

The LGA warns that this means that they will struggle to bring in the parent fees that they need to continue operating, risking redundancies or closures of settings, and a loss of the skilled and passionate staff that provide essential support to children.

Despite Government funding for early years funded places, 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.

Councillor Judith Blake, chair of the LGA’s Children and Young People Board, said that having enough childcare places will be ‘essential’ to support families and get the economy moving again. She added, ‘It’s vital that the Government urgently provides additional funding at a national level to ensure early years providers can remain open.’

Early years settings 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.

She added, ‘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.’

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.

The DSG was issued on 22 April highlighting that councils have flexibility to move DSG funding from closed providers to open ones, where this is needed to ensure sufficiency in a local area, against earlier statements that councils should pass through all DSG as normal to providers. This has caused more concern among providers who made business decisions based on earlier advice.

These last-minute changes have made it hard for settings to make informed business decisions while some early years settings have also struggled to access business support offered by the Government, placing further pressures on their finances.