Summer statement: Government 'without a plan' for the childcare sector and struggling families

Catherine Gaunt
Wednesday, July 8, 2020

Early years organisations have criticised the chancellor for failing to come up with a plan to protect nurseries and childcare businesses and for ignoring the sector's plight.

Nurseries and childminders did not receive any extra financial support in the summer statement, despite sector fears that one in four settings could close
Nurseries and childminders did not receive any extra financial support in the summer statement, despite sector fears that one in four settings could close

Meanwhile, children’s charities said there was ‘little’ targeted at helping families and cutting child poverty.

Earlier, Chancellor Rishi Sunak set out plans for how employers would be rewarded for keeping on employees after the furlough scheme ends in October, support to create jobs and traineeships for young people, cutting VAT for the services sector, and a scheme to encourage people to ‘eat out to help out’ restaurants and pubs – but there were no announcements of targeted help for other struggling sectors of the economy, such as childcare.

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA) said, ‘Once again we have seen the chancellor totally undervalue the childcare sector. The Chancellor’s Plan for Jobs is completely undermined by a lack of a Plan for Childcare.

‘The sector has been underfunded for years leaving many on the brink. Providers are telling us that without emergency funding the majority will be operating at a loss over the next few months. Many will be forced to close, leaving children missing out on great learning opportunities and parents unable to return to work. 

‘The Job Retention Bonus will help those bringing staff back from furlough but this may be too little too late by the time payments will be made next February. Nurseries are worried about making it to Christmas. Once again measures like VAT cuts and urgent investments were targeted at pubs and restaurants, not our children’s early education and development.

‘Supporting young people to enter the workforce is a great plan, but it can’t be at the expense of the early years sector’s most qualified and experienced professionals. They are vital for ensuring children get the highest quality care and education as well as training and supporting the next generation of early years leaders.

‘We have been clear with ministers across Government, they need to protect childcare as a foundation of the economy with immediate emergency funding and support long term sustainability through proper investment.’

Neil Leitch, chief executive of the Early Years Alliance, said it was ‘unfathomable that the Government has once again failed to commit to any additional financial support for the early years sector.

‘With one in four nurseries, pre-schools and childminders fearing closure within the year, rising to one in three in the most disadvantaged areas, it is clear that inaction is not an option - and yet the Government continues to ignore the fact that the childcare sector in this country is in crisis.

‘The chancellor today promised that the Government would “protect, support and create jobs”, but the fact is that if parents are unable to access childcare because so many early years providers have been forced into closure, this simply won’t be possible.

‘With the furlough scheme confirmed as ending in October, the financial pressure on childcare settings is only going to worsen over the coming months. While the new Job Retention Bonus for unfurloughed staff kept on until at least January is a welcome policy, for those providers unsure whether or not they will survive the autumn, it will come as little comfort. 

‘The Government needs to urgently reconsider this short-sighted approach and commit to providing the financial support that the childcare sector needs not only to survive the immediate challenges caused by the coronavirus crisis, but also to remain sustainable in the longer term.’

Families

Children’s charities said they were disappointed that there was nothing targeted at helping families struggling financially, or a comprehensive plan to help children to cope with the impact of lockdown and for services for vulnerable children.

Chief executive of the Child Poverty Action Group, Alison Garnham, said, ‘Extra support with finding a job is welcome, but without more investment in universal credit to make work pay and in affordable childcare many pandemic-hit parents will remain locked out of the labour market or in a job that keeps them poor. They certainly won’t be able to eat out to help out. 

‘To get the UK back to work and to tackle child poverty, we need good jobs and the childcare services that enable parents to work too – second earners are critical to help families escape in-work poverty.

‘It is disappointing that within a broad range of measures to support people during the immediate aftermath of lockdown and today that there is little that is targeted directly at struggling families. Children need a Covid-19 bonus too – an increase of £10 a week in child benefit would go a long way to protecting families during a period of huge uncertainty and reduce child poverty.’

Anna Feuchtwang, chief executive of the National Children’s Bureau, called for ‘urgent and long-term investment in local authority children’s services alongside wider public health funding - services that vulnerable families rely on the most, that are reeling from being stripped back to the bone over the last decade and that have been largely unavailable during lockdown. The absence of financial support for these services means that the chancellor risks not only the wellbeing of children today but also the deepening of inequalities in the future.

‘With many families keeping their youngest children at home out of concern for their physical safety, nurseries and childminders are struggling to afford to stay open. High quality early education improves children’s future life chances, but the opportunity to level up in the early years and support parents’ return to work will be lost without urgent financial support to the early education and childcare sector.

‘NCB alongside the children’s sector are calling for a cross Government Children’s Recovery Strategy that puts the needs of children at the heart of Government’s recovery planning and spending.’

Mark Russell, chief executive at the Children’s Society, welcomed plans to help young people into work, but said, ‘it was deeply disappointing to see so little in the chancellor’s plans to address the deep scars lockdown and school closures have inflicted on children’s happiness and mental health. 

‘This crisis has left many children at greater risk, with abuse and sexual and criminal exploitation more likely to be hidden from view, while others have struggled with isolation and been left at greater risk of the ravages of poverty with some parents sadly losing work. 

‘Jobs and protecting the economy are of course important, but so is protecting our children and helping them to flourish and shockingly, two-thirds of children living in poverty now have at least one parent in work. The measures announced today will do nothing to address this. 

‘What was needed was a comprehensive package to help children and young people. That means restoring vital funding to enable struggling councils to better help and protect vulnerable children, more open-access mental health support in the community and more help for families struggling financially. 

‘Without urgent action to protect children, help them through these tough times and support them to re-engage in education, their life chances could be seriously damaged. This will cause enormous harm not only to them, but also our economy in the long-run.’

Jobs and training

However, the Social Mobility Commission welcomed the targeted support for jobs and training for young people, saying, ‘We particularly welcome the support for the traineeships, including a £1,000 incentive for businesses who take on trainees. This helps unemployed young people with essential skills, CV writing and work experience.

‘But we are also pleased that the Government has engaged with some of the arguments that we made in our recent report on apprenticeships. The extra money for apprenticeships will help employers start reversing the decline in the number of opportunities for in-work training in recent years.’

'The Government can go further to improve social mobility by ensuring that those from disadvantaged backgrounds, who will be the most vulnerable in this economic downturn, benefit from the measures.’

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