Local authorities will no longer fund nurseries at pre-Covid levels

The arrangements for the spring term 2021 will mean that nurseries and other childcare providers will be funded at their actual attendance levels rather than pre-Covid levels.Child looking at computer

Since Easter, the Government has been funding providers at their usual attendance levels going on figures from 2019 because the actual attendance levels were so low.

Despite the fact that only 61% of children are actually attending nursery (latest DfE figures from 10 December) which was “lower than expected” according to the DfE’s childcare survey the Government has made the decision not to continue with this arrangement.

For many nurseries this means a sudden drop in income which could lead to them being unsustainable.

NDNA has made this case time and again to the DfE and yet again the early years sector has been totally undermined.

Purnima Tanuku, Chief Executive of NDNA, said: “The guidance linked to today’s announcement stating the Government will no longer fund early years providers from January at pre-Covid levels is really the last straw for childcare businesses.

“The Secretary of State for Education appears not to care about the early years sector and is treating providers appallingly compared with schools. At every turn he is giving additional financial support to schools for staff absences, for cleaning products, for additional resources, but nothing for early years.

“To give early years providers this news as they are about to close for Christmas, knowing they will have to be on standby in case there are any reported cases of Covid in their nurseries from Christmas Eve, just shows a lack of respect for their hard work and dedication throughout this pandemic. 

“Last week official figures showed there were 61% of the usual numbers of children in nursery. So their parental income has dropped while their operating costs have risen. The one month extension to the furlough scheme is of little help to childcare businesses who are suffering a staffing crisis and need their employees in work.

“They can’t square this circle. According to the DfE’s own survey published today, only 42% of providers believe they can continue to run their setting. To then reduce the funding lifeline which is keeping most of these businesses afloat is disgraceful.

“Nurseries have been the fourth emergency service throughout this pandemic – supporting the development of children but also enabling key workers to do their job. Lose the nurseries and you lose a crucial part of economic infrastructure. 

“This Government must put children first which means supporting those who support the children. Pulling the rug out from under the early years sector adds insult to injury.” 

Full information on funding for the Spring term can be found here.  

The DfE gave the following information about the funding arrangements: “We recognise that attendance may not be fully back to normal for all areas at the January 2021 census, and it may not represent the mid-year attendance in the normal way.  Therefore, by exception, in a local authority where attendance is below 85% of their January 2020 census levels, and where that local authority can provide evidence of increased attendance during the spring term, we will provide a top-up to their January 2021 census. The top-up, which would be made on a case-by-case basis, would only fund the additional places taken up after the January 2021 census week count and the total allocation for spring term will be limited to a cap equivalent to 85% of their January 2020 census level. This will give local authorities additional financial confidence to pay providers for an increase in attendance later in the term.”

The DfE will provide further guidance for local authorities in the new year, setting out the details of how the top-up will be applied and the evidence required from local authorities to receive the top-up.  They will also be following up early in the new year on plans for summer term funding.

The Minister also announced the new funding rates from April yesterday. Although an increase, it won’t be sufficient to cover providers’ operating costs or the rises in mandatory minimum wages. Read more here