Coronavirus: Nursery schools warn survival on a 'cliff edge'

The findings from a survey by sector organisation Early Education and unions NAHT, NEU and Unison highlight the impact of the coronavirus pandemic on maintained nursery schools.

It reveals that a third of nursery schools were in deficit at the end of the 2019/20 financial year, and that even before coronavirus only a half (51 per cent) expected to balance their books in 2020/21.

Due to increased costs as a result of the pandemic, and loss of parent fees during lockdown, just over a quarter (28 per cent) now expect to balance their budget in the current financial year.

According to the survey, maintained nursery schools reported an average loss of fee income from parents of £36,000 and extra costs of £4,000, putting further strain on already stretched budgets.

The report, Maintained nursery schools and COVID-19: vital community services on a cliff-edge is based on a survey of maintained nursery schools carried out in August and September to ascertain in more detail their current financial situation and the impact of Covid-19 on their finances.

There were 133 responses on behalf of 144 MNS in 63 local authoritiy areas.

There are only 389 maintained nursery schools left open in England, the majority in the most disadvantaged areas of the country.

The report highlights that during lockdown, according to DfE figures, 71 per cent of maintained nurseries were open versus 35 per cent of other early years settings.

Maintained nursery schools were unable to access Government sources of financial support, such as the business rates holiday or business loans, and – in line with private and voluntary early years providers - are not eligible for the extra support for Covid costs given to schools.

The Department for Education has yet to propose a viable long-term funding formula for maintained nursery schools to replace the stop-gap arrangements put in place in 2017. 

The organisations said that ministers have indicated that proposals are dependent on the spending review.

The sector is therefore calling on the Chancellor to provide:

• sufficient funding for a viable long-term funding formula for maintained nursery schools (c.£98m plus transitional funding as needed) from 2021-22
• extra support for the duration of the pandemic to ensure that extra costs and loss of income do not push maintained nursery schools into closure.

One nursery school said, ‘Prior to Covid we were projecting to get to the end of this financial year with a carry forward of £5,000; we are now projecting to be in deficit by approx £18,000.

‘Already had a deficit budget although four-year recovery plan was in place. This further loss to income and then restrictions on numbers of children we can take in in order to meet Covid staffing issues means this year is likely to place us in irrecoverable financial deficit.’

Another said that the impact of Covid on their finances meant that their survival was now on ‘a cliff edge’.

Early Education is calling for extra funding support for the whole early years sector.

Beatrice Merrick, chief executive of Early Education, said, ‘Successive early years ministers have described maintained nursery schools as the jewel in the crown of the early years sector but have yet to put in place a funding formula that will ensure their survival. 

‘The added strains of the pandemic have pushed these vital community institutions to the brink and beyond. We need additional support for the whole early years sector to tide it through the pandemic.

‘Funding rates for all providers need to be reviewed to ensure they are viable and targeted where most needed, i.e to the most disadvantaged communities. But as the Government acknowledges, one formula does not work for all.

‘Maintained nursery schools are expected to play a different role and deliver to a different standard. It is vital their specific funding needs are addressed.’

Paul Whiteman, general secretary of the National Association of Head Teachers (NAHT) said the survey ‘demonstrates the devastating impact’ of coronavirus on maintained nursery schools.

‘They played a vital role throughout lockdown, but once again have been made to feel like the forgotten relative of the education sector. This has left many teetering on the edge.

‘The Government repeatedly tell us how much they value maintained nursery schools - now is the time for them to demonstrate that this goes beyond just warm words and empty platitudes. These schools need both immediate financial support and clarity about long term funding arrangements.’

Kevin Courtney, joint general secretary of the National Education Union, said it was ‘very clear’ that without Government support the situation would get worse, with 72 per cent of nursery schools saying that they did not expect to balance their books this financial year.

Unison head of education Jon Richards said, ‘These nurseries play a huge role in supporting vulnerable communities. They are high quality, but quality costs. The positive impact on disadvantaged families cannot be underestimated.’

A Department for Education spokesperson said, 'We recognise the importance of maintained nursery schools and the valuable services they provide, particularly in disadvantaged areas. We have made significant financial support available to all nurseries, including maintained nursery schools, throughout the pandemic and the Coronavirus Job Retention Scheme is still available to them.

'We are providing local authorities with around £60m this year for their maintained nursery schools, in addition to the funding they receive for the early years education entitlements. We will set out longer-term funding arrangements for maintained nurseries schools in the Spending Review.'

CASE STUDY: MAINTAINED NURSERY SCHOOL ON THE IMPACT OF THE PANDEMIC

‘It has hit us hard. Our private childcare closed for three months so we couldn’t charge fees. In addition, we lost rental income on children’s centre spaces. This has now put our budget into 3-year deficit. We haven’t been able to access support from anywhere with to minimise the impact of Covid. ‘We have been turned away from DfE, local council and the LA. Am angry that we have been overlooked. We are now in a very vulnerable position where serious discussions need to be had about our future. We are a double outstanding school, it is beyond comprehension. We do nothing but firefight the financial crisis, bought on because we have been grossly underfunded for years.

‘The Covid restrictions mean that we cannot offer the full breakfast and after school club offer which is now having more of an effect on our childcare fee income. In addition, our admissions are 30-40 per cent down on our usual numbers

‘The cost for cleaning products, extra hours for cleaning, extra resources (needed to duplicate some for each bubble, provide individual packs etc.) has had a significant impact on our already tight budget as these costs could not be foreseen but were not luxuries or avoidable.

‘It was money spent to ensure that we were compliant with government guidance and could reopen safely.

‘We are very concerned as “wraparound” completely stopped for almost six months and will take considerable months to recover (not expecting a full recovery of previous income as many parents changing working patterns). All staff are on permanent school employment contracts. Very worried that this loss will be catastrophic for our school.’