Nurseries in 'huge shock' as government limits access to furlough scheme

Nurseries are reacting with shock and anger to new guidance by the government that childcare providers cannot use the furlough scheme as well as claim the funding for three and four-year-olds and disadvantaged two-year-olds.

Nursery owners voiced their dismay on twitter with Heidi Batra saying: “It’s unbelievable! We didn’t charge our parents either. We paid the 80% wages. We are going to have to make some hard decisions” with another saying: “My wife who thought she had saved her nursery and her 9 staff is now in tears and worried sick of now going into liquidation. This is a huge huge u turn.”

The guidance states: ‘No organisation should profit from the exceptional financial support available, and should therefore only access the support required. For example, organisations which continue to receive government funding should not furlough staff whose salaries that funding could typically be considered to fund, and therefore will not need to access the Coronavirus Job Retention Scheme (CJRS).’

The CJRS means companies can furlough staff who then receive up to 80 per cent of their monthly wages, up to £2,500 a month. However the government states they would expect nurseries receiving early years entitlement funding to use this for staff costs and ‘not furlough them’. The government had issued earlier guidance which led nurseries to assume they could access both the schemes but it has now clarified this with updated guidance.

Nurseries had assumed they would be able to fully claim from the furlough scheme but the new guidance states that for example if a provider gets 40 per cent of its monthly income from early entitlement funding and 60 per cent from fee paying parents, it can only claim support from the furlough scheme for up to 60 per cent of the monthly income.

'New guidance shows total disregard for fantastic work early years providers are doing'

Purnima Tanuku, chief executive of National Day Nurseries Association, said: “This comes as a huge shock to the sector which is relying on both the Job Retention Scheme and early years funding entitlement to be able to survive this crisis.

“Many nurseries that have remained open to critical workers’ children are doing so at a huge financial loss.

“The Government does not appear to have early years on their agenda, which is appalling at a time when early years providers have stepped up to deliver the care that’s desperately needed for critical workers.”

Many nurseries are currently caring for vulnerable children and the children of key workers, with Ms Tanuku calling them “the fourth emergency service”. She said the new guidance is a “total disregard for the fantastic work early years providers are doing, risking their own safety every day to keep the country going. The Government does not appear to acknowledge or recognise this”.

The NDNA warns the guidance will lead to redundancies and nursery closures.

'Completely unacceptable' the government 'is watering down this support'

Neil Leitch called the new government guidance a “kick in the teeth” and 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.”

He called on the government “to urgently rethink its stance” and added: "For early years providers across the country who have already struggled for years as a result of government underfunding, 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.”

Many nurseries 'face the risk of permanent closure'

Liz Bayram, chief executive at the Professional Association for Childcare and Early Years (PACEY) echoed the concerns of NDNA and the Alliance, saying: “Any childcare provider who employs staff and delivers funded early education places is now between a rock and a hard place with the Government back-tracking on its commitment to allowing them to access its furlough scheme and continue to receive funding for these places.”

She added: “The funding for early education DOES NOT cover the cost of delivering that place for most providers and we are concerned many will now have no option but to face the risk of permanent closure when this pandemic is over.

“Most nurseries, pre-schools as well as childminders who employ assistants should today be starting their first application for the CVJR scheme, hopeful that the cash they need to survive will arrive imminently. Instead they are now faced with having to revisit the decisions they have made on furlough; complex calculations of the proportion of staff delivering early education places and more worry at an already difficult time."

A spokesperson from the Department for Education said: “We have already confirmed that we will continue to fund councils for the free childcare entitlements for the duration of these closures, as we ask settings to remain open where needed for children of critical workers and most vulnerable.

“To support them with this we are relieving some of the burdens on staff during these challenging times, temporarily changing some of the requirements of the Early Years Foundation Stage framework and providing significant financial support, including a business rate holiday for many private providers. We have set out further clarity on other support available, including eligibility for the Coronavirus Job Retention Scheme where an employer receives government funding.”

Click here to read the full guidance -