Nursery owners in Thanet say they will suffer huge financial losses after the government “changed the goalposts” for access to funding during the coronavirus crisis.
Nationally, the Early Years Alliance, which represents some 14,000 members in the industry, says government has backtracked on guarantees of financial support for childcare providers during the coronavirus crisis by ‘watering down’ the help on offer.
Last month the Department for Education (DfE) published guidance for the early years sector which confirmed nurseries and other providers could continue to receive ‘free entitlement’ funding for children not attending their setting during this period. They were also told providers could use the Coronavirus Job Retention Scheme, providing grants covering 80% of monthly wage costs for staff members employed but not working.
But updated guidance issued on Friday (April 17) has changed the conditions, particularly in terms of furloughing nursery staff.
It says some providers will only be able access the Job Retention Scheme “to cover up to the proportion of its pay bill which could be considered to have been paid for from that provider’s private income”. This means many nurseries won’t be able to get full access to both schemes.
The decision has been slammed by Thanet providers including Marc Rhattigan (pictured) of Bright Start nurseries.
The father-of-four, who lives in Cliftonville, owns and manages three nurseries, employing some 140 staff.
He said: “It’s an utter shock and disgrace that the government has done a U-turn on the furlough scheme for early years. It just again shows the disregard the government has on the importance of the early years sector.
“I have over 140 staff across my three settings. After the government lockdown announcement and the new rules that we could only provide care for key workers, the child numbers dropped from around 400 a day to around 11-14 children a day.
“We decided to close two sites and keep our Margate site open with four staff and to furlough the 136 staff. The government said we could do this and claim the 80% salary as well as keep our early years funding, which makes up about 30% of our income.
“Restaurants and leisure venues have been given £25,000, small businesses £10,000, but as most nurseries are large buildings and go over the £15,000 rateable value we receive nothing.
“We have kept the nursery open despite nearly 80% of other local nurseries closing, losing thousands of pounds a week as with only a maximum of 16 children and a huge site it’s not cost effective. We have done this to support our key workers as I see this as my very small contribution. We have even taken other temporary placements from other nursery children which we won’t receive any extra funding for.
“We do this because we care and know without having childcare many of our vital key workers couldn’t work. I made the promise to my staff to pay them the 80% and unlike the government I won’t go back on my word as they are amazing staff and they need to live and pay their bills.
“But this comes at a huge expense to myself and I will have to release a huge majority of my personal assets to do so. I stand to lose around £165,000, if I can factor in fully opening by the end of May. This figure will increase if not, but either way this will financially drain me and the nursery.”
Bright Start nurseries have not charged parents any fees since the closure despite some private schools still being able to charge 80% fees and the 80% furlough grants.
Manor House Nursery, which has sites including Margate and the forest school at Quex, has accused the government of “sticking the knife in” and says the result will be the collapse of the Early Years sector in the UK and a resulting loss of jobs.
The group, owned by Sean and Jayne Sheerin says the government funding is nowhere near enough to cover costs, adding: “Our government is of the opinion that funding covers everything, like some magical fairy dust. They have now decided to U-turn on the assurances given a month ago and install conditions on the furlough process that mean all providers can now only claim a much smaller percentage of furlough. The result of this will be closures across the country.”
Neil Leitch, chief executive of the Early Years Alliance, said: “It is completely unacceptable that having given a clear and explicit assurance to childcare providers that they would be able to rely on financial support from both ‘free entitlement’ funding and the Job Retention Scheme during the coronavirus crisis, the government is now saying that it will be watering down this support.
“Early years businesses will have made significant financial plans and decisions based on the guidance already published, and many will have already started furloughing staff. It is simply too late for the government to start adding new caveats, conditions and limits now.
“For early years providers across the country who have already struggled for years as a result of government under-funding, to be told weeks into this crisis that the support they were promised may be far less than they were led to believe is a complete kick in the teeth. What the government is proposing would have a devastating impact on childcare settings, and in the worst cases, could lead to permanent closures across the sector.”
Department for Education
The Department for Education says: “On March 17, the Chancellor confirmed that the government will continue to pay local authorities for free early years entitlement places for 2, 3 and 4 year olds to support providers at this time. On 18 March 2020, the government also announced a business rates holiday for many nurseries in England for the 2020 to 2021 tax year.
Early years settings should remain open where they are needed to provide childcare for the children of critical workers who cannot be cared for safely at home, and vulnerable children.
A private provider should only furlough employees, and therefore seek support through the Coronavirus Job Retention Scheme, if they meet the following conditions:
- the employee works in an area of business where services are temporarily not required and where their salary is not covered by public funding
- the employee would otherwise be made redundant or laid off
- the employee is not involved in delivering provision that has already been funded (free entitlement funding)
- (where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child
- the grant from the Coronavirus Job Retention Scheme would not duplicate other public grants received, and would not lead to financial reserves being created
Some early years settings may also be eligible for the Small Business Grant Fund (SBGF).
“The DfE is considering appropriate measures to monitor the use of these schemes in order to detect any duplication of funding, and will be considering potential options to recover misused public funding as required.”
A petition objecting to the changes has been signed by more than 70,000 people. Find it here