Financial support for nurseries for coronavirus / COVID-19

This page includes information on:

  • What financial support is there for my nursery?
  • Funding  
  • Grants
  • Business Rates 
  • Job Support Scheme
  • The Coronavirus Statutory Sick Pay Rebate Scheme
  • Flexible Furlough Scheme
  • Coronavirus Childcare Assistance Scheme (C-CAS) - Wales 
  • Do we have to pay employees if they are medically advised to self-isolate?
  • Transitional Support Fund for Scotland nurseries
  • Do I have to pay my staff if I am forced to close suddenly?
  • Economic Resilience Fund (ERF) - Wales
  • Kickstart scheme
  • Bonuses for apprenticeships
  • Traineeships support
  • Coronavirus Job Retention Scheme for nurseries

What financial support is there for my nursery?

See all support.

Funding

England
Providers will continue to receive their free entitlement funding for all of the summer term whether they are closed or have stayed open.

The Government has now announced its intention for the early years funding in the autumn term in England.

Department for Education has published guidance on how local authorities can use flexibility in how they allocate early entitlement funding, 

The guidance is clear that any redistribution can only be done in exceptional circumstances and in partnership with their local early years sector. Where possible they must agree any funding changes with providers rather than impose them and also give appropriate notice. 

Councils must also work with providers to understand what changing their funding would mean in terms of you being able to paying for your fixed costs. Any nursery which has its funding reduced can claim for additional staff members on the furlough scheme (CJRS) proportionate to the amount of funding lost.

The DfE has updated its 'Actions for early years and childcare providers during the coronavirus outbreak guidance' with information for parents on temporary changes to the 30 hours free early education entitlement which means that children of those critical workers whose hours change as a result of the outbreak will still be eligible for places.

In its 'What parents need to know about educational settings during the coronavirus outbreak' guidance , the DfE has added further information for parents regarding the 30 hours funded childcare scheme:

  • Parents who no longer meet the minimum wage requirement for 30 hours places and/or Tax-Free Childcare as a direct result of the coronavirus outbreak will be treated as eligible and should continue to apply for or reconfirm their place
  • The Government intends to allow critical workers - who now exceed the maximum income threshold of £100,000 per year as a result of increasing their hours - to remain eligible for 30 hour places for the current tax year. This is subject to Parliamentary approval
  • All eligible parents are encouraged to apply for a place for their child or reconfirm their child’s existing place even when settings are closed. This will ensure a smooth transition back into childcare once nurseries are fully reopened
  • The DfE has asked local authorities and childcare providers to accept the codes of vulnerable children and children of critical workers who have missed the 31 March deadline so they have a summer term place
  • The DfE will be updating its guidance on 30 hours once a wider reopening takes place.

Scotland
The Cabinet Secretary, John Swinney issued a letter to Local Authorities (LAs) on 15 May. Ministers and CoSLA Leaders agreed a number of funding flexibility measures on 15 May for LAs, which were detailed in the letter from the Scottish Government to senior LA officials. This includes where local authorities make a critical childcare offer to key worker families and vulnerable families, this should be free at the point of access during the emergency response period. 

This letter provides further information about the extent and nature of these flexibilities for education and early learning and childcare grant funding streams to support learning, critical childcare provision and children and families during the emergency response period. By ‘critical childcare provision’, the Scottish Government means childcare or equivalent arrangements provided by LAs in either Local Authority settings or private, third sector, independent or childminding settings in response to the needs of keyworkers and vulnerable children as defined in 'Coronavirus (COVID19): school and early learning closures – guidance about key workers and vulnerable children', published 31 March 2020.  

On 30 July the Scottish Government published interim guidance on the requirements for ELC settings and local authorities regarding the delivery of Funding Follows the Child and the National Standard from August 2020. It features increased flexibility around business sustainability elements and payment of the Living Wage and recognises some of the financial pressures on you as providers and local authorities when looking at how to operate beyond August.

Wales
The Welsh Government has published guidance for Local Authorities (LA) and providers, plus a list of frequently asked questions for parents and on the reopening of The Childcare Offer.

This Local Authorities guidance is non-statutory transitional guidance developed to support local authorities in reopening the Childcare Offer for Wales for applications following its suspension on 1 April 2020 as a result of Covid-19.

The provider guidance includes a number of FAQs around what providers must do as a result of reopening applications for 30 hours of early education and childcare for three-and-four-year-olds.

The Parent FAQs direct parents to their local Family Information Service for any questions about the Offer, for example eligibility and how to apply.

Cash grants for small businesses

England
£10k Grants Available for business which receive Small Business Rate Relief (where your rateable value is less than £15,000). Your local authority should contact you about receiving the grant automatically. Find out more here.

We are pushing for nurseries to be included in the £25,000 cash grants currently only available for retail and leisure businesses.

Local authorities now have access to discretionary funding to support businesses that are struggling to survive due to the coronavirus shutdown but are unable to access other grant funding. The grants available under this fund will be for £25,000, £10,000 or any amount up to £10,000 and each local authority will be responsible for their own scheme and have discretion in determining which businesses they will prioritise.

Scotland

£10k Grants Available: for small business ratepayers through the Business Support Fund. You need to be a ratepayer eligible for the Small Business Bonus Scheme but in receipt of Nursery Relief, and with a rateable value up to £18,000. More information here.

Get free support and advice from Business Gateway. Speak to a local adviser over the phone and online. 

A further package of measures has been announced by the Scottish Government which includes £120 million to extend the Small Business Grant scheme to ensure that, in addition to a 100% grant on the first property, small business rate payers will be eligible to a 75% grant on all subsequent properties. Further information from Scottish Government can be found here. 

We are aware that many of you are not eligible for the £10,000 but we continue to lobby both the UK and the Scottish Government to make changes to the eligibility criteria.

Wales
A grant of between £25,000 and £100,000 is available to assist qualifying SME’s(between 10 and 249 employees). The grant can only be claimed by businesses that meet the following criteria:

  • Are VAT registered or sector/business exempt from VAT with a turnover greater than £85k, details of VAT exemption can be found here
  • Are headquartered in Wales or have an operating address in Wales that has full decision-making autonomy
  • Have experienced a drop in turnover greater than 60% since 1st March 2020
  • Are able to demonstrate the business / organisation will be sustainable for at least 12 months with a sustainable business plan to trade out of crisis
  • Are viable entities able to confirm some access to funding to cover costs and can demonstrate attempts (successful or otherwise) to secure funding from wider sources (for example a bank, HMRC, Development Bank of Wales, UK Government loan facilities such as the Business Interruption Scheme or direct Bank of England support) before applying for this fund
  • Are able to confirm that funding from any other Welsh Government non-repayable COVID-19 grant funding source is not being pursued*
  • Are able to demonstrate that without additional support the viability of the enterprise will be under threat including the number of jobs this support protects
  • Undertake that for as long as the Coronavirus Job Retention Scheme is in place, they will not make any future compulsory redundancies.

Find out more here

In Wales we are aware of some local authorities that have informed providers that they have not heard of the Business Support Grant for childcare providers and others who have been rejecting applications due to their lack of awareness. If you are coming across this issue refer the local authority to the Support for childcare providers: coronavirus guidance. If the local authority continue to tell you that you are unable to access this grant, please let us know as we are raising these concerns with Business Wales and the Welsh Government.

If organisations wish to discuss the varying options then they can also contact Business Wales.

Business Rates

We have seen further information published on the Business Rates holiday for nurseries in England. This applies to any business on the Ofsted Early Years register where part of the building is used for the delivery of the EYFS.

If you rent your nursery building you may want to contact your landlord to make them aware of this and we have also prepared a template rent holiday request letter you may also wish to use to ask for a rent payment holiday as well. 

Registered childcare providers in Wales receive 100% relief until 31 March 2022.

Job Support Scheme

The Job Support Scheme will begin on 1 November once the Coronavirus Job Retention Scheme finishes:

  • Employees who are not needed to work their full-time hours due to the impact of COVID-19 can have their incomes topped-up under the scheme
  • To be eligible an employee must work a minimum of 33% of their usual hours
  • Government and employers pay one-third of their remaining unworked wages each
  • The minimum an employee would receive is 77% of their usual earnings based on working only 33% of their usual hours
  • As worked hours increase, the percentage of an employee’s usual income received will also increase
  • The scheme will be accessible to all small and medium firms – while larger firms would have to show they are struggling to be able to qualify
  • All employees will be eligible, regardless of whether they have been furloughed under the existing Coronavirus Job Retention Scheme.

We know that this scheme will be less generous than the existing furlough scheme – which has been shown to provide 55p of support for every £1 of income nurseries lost – but it avoids a complete cliff edge with the end of the existing scheme approaching.

This doesn’t address the ongoing sustainability concerns we have from underfunding of early years places.

In addition, the Chancellor announced:

  • Extension to VAT repayment plans
  • Pay As You Grow scheme for businesses which took out government-guaranteed loans
  • These will be extended from six to ten years
  • Businesses on these schemes can move to interest-only payments or suspend payments for up to six months if they are in real trouble
  • Business Interruption Loans for larger businesses will be extended for up to ten years.

Coronavirus Statutory Sick Pay Rebate Scheme

The Coronavirus Statutory Sick Pay Rebate Scheme was announced at the Budget to support businesses with fewer than 250 staff by allowing them to claim back the costs of paying Coronavirus related SSP. As employers, you should receive a repayment for the relevant rate of SSP for two weeks, that has been paid to current or former employees.

This covers staff who are absent:

  • With a confirmed Coronavirus case or being sick with symptoms
  • Having to self-isolate while being unable to work from home
  • Who are shielding because they’ve been advised that they’re at high risk of severe illness from coronavirus.

This scheme will apply for an eligible sickness period starting on or after 13 March 2020 and shielding from 16 April. As the SSP rates changed in April you can also use the SSP calculator to work out the actual claim amount.

If you have specific questions or experience difficulties claiming through the scheme you can contact HMRC. However, we have been made away that there will be a lot of demand on these support services as the scheme only opened last week.

Flexible Furlough Scheme

The Chancellor has announced a ’flexible furlough’ scheme. So from 1 July 2020, you now have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work. 

Under the new scheme you can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full for those hours. HMRC has said that there will be no minimum time that you can furlough staff for. 

Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When it comes to submitting a claim you can do this on a monthly basis or you should also be able to make claims on a fortnightly or weekly basis. When you do claim, you will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. 

If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough through the original scheme and you can continue to claim the grant for their full hours under the existing rules.

Coronavirus Childcare Assistance Scheme - C-CAS Wales

The childcare offer for Wales has been temporarily replaced by the Coronavirus Childcare Assistance Scheme (C-CAS). Please ensure that you check the parent and provider guidance and speak to your Local Authority for updates on how the C-CAS will work in your area.

C-CAS will close to new entrants from Sunday 12 July. This date relates only to applications for C-CAS from families. Decisions on whether or not to increase the number of providers offering C-CAS will be for local authorities, taking account of both capacity in the sector and the level of demand in their areas.

Families who had registered for CCAS prior to 12 July can access it as needed for the remainder of its term. At this time it remains available where only one parent in a family is a critical worker. However, C-CAS is only available to support critical workers to work. If they are not in work, they should not be accessing childcare funded under C-CAS.

Some local authorities are no longer accepting new applications. Get more information from your local Family Information Service. Funding under C-CAS for older siblings will end at the end of summer term, at the latest (your local authority will decide the closing date). Vulnerable children may be an exception, subject to local authority decision

See CCAS guidance here.

Do we have to pay employees if they are medically advised to self-isolate?

Our legal helpline says:

Employees will be entitled to statutory sick pay if they are advised to self-isolate. Their employment contract may provide for enhanced pay.  

Employees will also be eligible for statutory sick pay if they are self-isolating as a result of members of their household who have Coronavirus symptoms.

Employers with less than 250 members of staff will be reimbursed for any statutory sick pay paid in relation to the first 14 days of sickness related to the Coronavirus.

The Government has suggested that statutory sick pay will be paid from day 1 for absence related to the Coronavirus.  We are waiting for further detail in relation to these provisions.

If an employee is self-isolating – for example if they have asthma or diabetes - but not actually sick, they can be considered for the furlough scheme.

Transitional Support Fund for Scotland nurseries

The Transitional Support Fund will help childcare providers in the private, voluntary and not-for profit sectors, including out-of-school care providers, meet the extra costs incurred to comply with public health guidance in response to COVID-19. The Fund will provide one-off grants to eligible settings. Grant amounts vary according to the number of Care Inspectorate registered places in your setting.

Further information on the Transitional Support Fund including information on eligibility and the levels of grants, is available here.


The Fund will open for applications by the end of August 2020. The last date for submitting a grant application will be Friday 9 October.

Do I have to pay my staff if I am forced to close suddenly?

If you have to close the nursery, generally speaking you would still be obliged to pay employees as you are not meeting your obligation to provide work. If you have a lay-off clause in their contract, you could invoke this in which case the employee would only receive statutory guaranteed pay.

This is currently £29 per day (or less if the employee is paid less) and it is paid for the first week of work lost. It needs to be in the contract though so this should be checked.

As an alternative, the employees could take holiday but this would have to be by agreement as the situation of a sudden closure would not allow the employer to give sufficient notice to compel them to take the holiday.

If you are in any doubt, contact our legal helpline for members.

Economic Resilience Fund (ERF) - Wales

The next phase of the Welsh Government’s Economic Resilience Fund (ERF) was announced 9 June. The Welsh Government has stated this phase of the ERF is being targeted at microbusinesses, SMEs and large businesses of critical economic importance, which have yet to receive financial assistance from the ERF. 

See more information on eligibility criteria and an online eligibility checker.

Kickstart scheme

Under this scheme the Government will directly pay employers to create new jobs for any 16-24 year old at risk of long-term unemployment. They will pay young people’s wages up to 25 hours a week for six months, plus an amount to cover overheads. Employers will be able to top that amount up if full time work is needed. Read more in the summer statement here.

Bonuses for apprenticeships

The Government announced grants of £2,000 for companies taking on apprentices and £1,500 for apprentices over 25. Read more in the summer statement here.

Traineeships support

A £111 million investment to triple the scale of traineeships in 2020-21 for more young people have access to high quality training. Read more in the summer statement here.

Coronavirus Job Retention Scheme for nurseries

We urge you to take this up at a local level with your own MPs - use our template CJRS letter for MPs  - so you can highlight to them exactly what this will mean for your nurseries and staff. 


What is the Coronavirus Job Retention Scheme (CJRS)?

Through the Coronavirus Job Retention Scheme all UK employers can access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

You can only furlough staff that can be shown to have been paid for through income other than the Government’s funded hours. This means that if 100% of your children are funded through EEF money you would not be eligible to furlough any staff and if you received no government income at all, you would be able to furlough all of your staff if the other CJRS criteria are met. In this guidance the Government sets out how it plans to avoid double funding of staff roles through both the early entitlement funding (EEF) and the CJRS. Where they refer to Dedicated Schools Grant (DSG) funding in the guidance they mean the funding settings get for 2, 3 & 4-year-old places for either 15 or 30 hours of childcare.

We know the reality is a mixed picture and very few childcare providers will be able to demonstrate exactly which staff are paid from each income source. In this scenario providers will need to look at their private and public funded income and allocate the same ratio to their staffing budget. You are then only able to furlough staff who make up the same proportion of your staffing budget, as your non-government income makes up of your overall income. Further down this page is a step by step guide to the process with an income/outgoings hypothetical example. 

How does the Coronavirus Job Retention Scheme work?

From 1 July, there will be more flexibility in the CJRS. You can now:

  • Flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
  • till be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

To access the scheme you will need to:

  • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
  • HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

You can find further information here.

How long will the Coronavirus Job Retention Scheme run for?

This scheme has now closed to new entrants (end June). 

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • In July the scheme will remain the same with the government paying 80% of wages up to a cap of £2,500 as well as employer National Insurance Contributions (NICs) and pension contributions for the hours the employee doesn’t work. Employers will have to pay 100% and contributions for any hours spent off furlough or for annual leave
  • In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay NICs and pension contributions. It will be more flexible with employers able to bring people back part-time and a top-up from the government’s scheme
  • In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay NICs, pension contributions and 10% of wages. The employee will still receive 80% of their income for the time they are furloughed
  • In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total.
  • The Government plans to finish the scheme at the end of October

For small employers, some or all of your employer NIC bills will be covered by the Employment Allowance, so you might need to check whether you qualify for this as it will mitigate that part of the tapering of the government contribution.

Can I utilise the Coronavirus Job Retention Scheme for my nursery?

This scheme has now closed to new entrants (end June). A private provider should only furlough employees, and 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; and 
  • The grant from the Coronavirus Job Retention Scheme would not be duplicative to other public grants received and would not lead to financial reserves being created
  • The employee has already been furloughed for a minimum of three weeks prior to 30 June 2020.

See guidance here. 

Can I claim under the Coronavirus Job Retention Scheme as well as claim flexible free entitlement?

Childcare providers in Wales and England will not be able to fully access both the early years entitlement funding and the Coronavirus Job Retention Scheme.

If it is difficult to distinguish whether staff are funded through free entitlement or private income for the purposes of meeting the first three conditions as listed above, then an early years provider can access the Coronavirus Job Retention Scheme to cover up to the proportion of its salary bill which could be considered to have been paid for from that provider’s private income.

This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s free entitlements for all age groups.

In line with the conditions of the scheme listed above, providers should initially use the month of February 2020 to represent their usual income in calculating the proportion of its salary bill eligible to be covered by the scheme.

Providers should adjust these proportions in subsequent furloughing applications if their income from the government’s free entitlements changes, but are not expected to make any adjustments in relation to changes in parent-paid income.

To illustrate, the guidance offers the following example:
If a provider’s average monthly income is 40% from DSG and 60% from other income, the provider could claim CJRS support for up to 60% of their salary bill.

This would be done by furloughing staff whose usual salary / combined salaries come to no greater than 60% of the provider’s total paybill.

These proportions could change in subsequent furlough applications as a result of DSG income changing (but not where income from parents increased or decreased).

For example, if this provider subsequently receives additional DSG income from a local authority as a result of providing additional hours of childcare, such that its new DSG income would represent 55% of its total income in February 2020, then its maximum use of the furlough scheme should, from that point, be reduced to 45% of its paybill.

Some nurseries will have put claims in due to concerns about cash flow and you will need to ensure you have approached the scheme reasonably and fairly according to how you see the guidance at the time of your claim. You should look to keep the evidence that backs up your reasoned interpretation so that if ever challenged by HMRC in the future, you can explain your claim.

I’ve been able to access other grants or support – will that count in my public funded income?
The government have confirmed that access to grants like the £10,000 small business grant does not affect applications to the CJRS. As a rule, you don’t need to include one of grants or awards in your calculation but if your regular income from public funding changes this should be taken into account.

Job Retention Bonus

In his summer statement The Chancellor laid out plans for a Job Retention Bonus, where employers will receive a £1,000 bonus when they bring back furloughed staff to jobs that pay them at least £520 a month until January. Read more in the summer statement here.

To be eligible, employees will need to:

  • Earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
  • Have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
  • Have been continuously employed by you up until at least 31 January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. We have been told that more information about this scheme will be available by 31 July and full guidance will be published in the Autumn.

How nurseries can access the Coronavirus Job Retention Scheme

The online system for making claims opened on 20 April and claims can be backdated until 1 March if applicable. You can expect to receive your furlough grant within four to six days of submitting your claim.

How should I approach the scheme for my setting(s)?

We have had a lot of enquiries from members about the value of the claim they can make. This is because the system of early years funding has become increasingly complicated over the years. It is important to follow a step by step process to get to the right calculation for your setting(s).

In the following process we have included some figures based on the below example. For simplicity we have used rounded numbers and the 40:60 example provided in the Government’s guidance. We know that all settings will be very different and there will be a lot of other variables. A lot of calculations will have to take place for you to be able to make a submission.

Example figures: 

 Income  Outgoings
 Feb 2020  Feb 2020
 Public - £4,000  Staffing - £7,000
 Private - £6,000  Non-staffing - £3,000
 Total: £10,000  Total: £10,000

Using figures from the above example we have suggested a step-by-step process settings will need to use:

  1. Look at February’s income breakdown to calculate % of private and public income. 
    (In the above example it’s 40% public income & 60% private income)
  2. Look at entire wage bill = £7,000
  3. Calculate % of wage bill attributable to private income = £4,200 (this is 60% of £7,000)
  4. Look at the number of staff whose combined staff costs comes up to that level 
    (In the example above you can’t furlough more staff than those who add up to £4,200. Eg 3 employees who cost £1,400)
  5. Furlough those staff whose salary/combined salaries comes up to that level
  6. Submit a claim to the CJRS for those staff who have been furloughed – HMRC has produced a step by step guide for this process
  7. Claim 80% of the salary for those staff furloughed to pass through to employees 
    (In this example the amount claimed would be £3,360 (£4,200 x 80%). HMRC has developed an online calculator for working out what you can claim.)
  8. Check whether there are staff that you have already furloughed which would take you over the threshold 
    (In this example if the staff you furloughed total £4,201 or more then you would have to un-furlough staff to take this under £4,200) 
  9. If you have already furloughed more staff then you are entitled to claim for under the scheme – you will have to un-furlough them and pay 100% of their salaries and staff costs.

My income for February was not typical because of the way half term affects the payments I get for funded places. 

The government has said you can look at the normal weeks in February and apply an average across the whole month. For example, if half term week gives a different income than a usual week you can work out your income over the three normal weeks in February and use that to calculate an average for the whole month.

What happens if the local authority increases or reduces the amount I get compared with February?

In responding to questions we have raised on your behalf the government have said that February should be used as a guide month as it was the most recent month not to have been affected by the spread of Coronavirus and the measures to control it. They have said that providers are not expected to make any adjustments to the parent income from February to work out their public to private income ratios. However, if a local authority increases or decreases your funding, this will need to be taken into account. 

We have produced some examples below to demonstrate how you might take this into account. For ease we have used rounded numbers that aren’t supposed to reflect the real complexities settings will face.

Claiming for employees furloughed on or before 30 June

You need to claim by 31 July for employees furloughed through the Coronavirus Job Retention Scheme (CJRS) for periods ending on or before 30 June.


I have made a mistake on a claim

You can now delete a claim online within 72 hours of submitting it. Search 'claim for wages through Coronavirus Job Retention Scheme' on GOV.UK.

See all coronavirus support  

Disclaimer:  Any information above from our legal helpline is provided for general guidance regarding rights and responsibilities.  This should not be treated as formal legal advice and no lawyer-client relationship has been created. Our legal helpline makes every reasonable effort to ensure this information is accurate at the time of publication but laws may have since changed.