Government condemned for ‘dwindling support’ as sector faces drop in funding and demand

Kathy Oxtoby
Thursday, February 18, 2021

Education experts warn of a ‘significant reduction’ in Government funding, and that demand for early education and care might not return to pre-pandemic levels ‘for some time’.

Free entitlement places have been funded on the basis of headcount since January.
Free entitlement places have been funded on the basis of headcount since January.

Early years providers are set to experience ‘a significant reduction in Government funding’, a new education catch-up report has warned.

The Government's decision to no longer finance early entitlement places based on pre-Covid levels of attendance also means that ‘the approach to funding childcare places from January 2021 is likely to need to change as a result’, according to analysis by the Education Policy Institute (EPI).

Published today, the EPI report on education reopening and catch-up support, funded by the Nuffield Foundation, includes an examination of early years policy across the UK.

EPI researchers also noted that ‘the levelling off of attendance rates in England from November suggests that there is a risk that demand for early education and care might not return to pre-pandemic levels for some time’.  

‘Significant’ impact on incomes
In addition, ‘these rates do not tell us how many hours per week, on average, children are attending for. Robust estimates of whether families are using more, less or the same amount of early education as would be expected in the absence of a pandemic is so far unavailable’, the report stated.

The report also warned that children attending settings for fewer hours ‘could have a significant impact on the incomes of early years providers, which is based on the hours of childcare they provide.’

Read the full report here 

Sector comment: Fighting not to be ‘forgotten’
Neil Leitch, chief executive of the Early Years Alliance, said: The EPI is completely right to highlight the ongoing challenges that nurseries, pre-schools and childminders in England face as a result of dwindling government support.

'Government must provide urgent financial support' says Neil Leitch.

‘While the Government's decision to base spring term early years funding on the number of children registered at a setting is better than its previous plan to base funding on children physically in attendance, it still falls a long way short of funding on pre-Covid levels, and many settings in England are likely to struggle to remain financially viable throughout the pandemic and beyond as a consequence,’ he said.

Mr Leitch said the EPI report was – ‘right to point out that Department for Education statistics on early years attendance levels do not include any information on whether or not children still attending a setting are taking up less hours. As a result, the financial position of many providers may be a lot worse than the Government realises’.

He added that while there is currently much focus on the planned reopening of schools, ‘it is vital that the early years sector, which delivers both vital childcare to parents and critical early education to young children, is not forgotten’.

‘With demand for early years places likely to remain much lower than normal for some time, the Government simply must provide the urgent financial support that the sector needs – or risk losing quality providers from the sector for good.’

Purnima Tanuku OBE, chief executive of National Day Nurseries Association (NDNA), said: ‘Research has shown how important early education settings are for children’s development and learning. It’s clear that lockdowns and time out of nursery have impacted on children, which is why it’s so important to get this support right.

'Ministers must rethink funding' says Purnima Tanuku.

‘Operating in a pandemic and keeping children and staff safe has naturally meant extra costs for providers, at a time when both funded income and parental fees are lower due to reduced demand. Time and time again early years providers in England have not been considered for practical and financial support from the Government that could help them weather this storm.

She said the decision to only fund places in England on headcount from January ‘has taken a source of funding support away from providers at a time when they have needed it most’.

‘With the majority of settings worried about whether they will make it to Easter without having to close their doors for good, impacting on sufficient childcare being available in the future. It’s clear that Ministers must rethink funding and identify more support to providers,’ she said.

The report also highlighted that after disruption during much of 2020, by the autumn, ‘the proportion of early years providers that were open for children increased substantially’.

Early years providers reopened most quickly in Wales and Scotland, where by October more than 90 per cent of settings were open, compared to around 80 per cent in England.

Some key forms of support for providers across the UK such as the Coronavirus Job Retention Scheme have remained in place across the UK over this period.

Government support for early years providers during the autumn term 2020 ‘appears to have been most generous in England and Northern Ireland where some funding was over and above current demand for places’, the report noted. However, since January 2021, ‘England has reverted to allocating funding based on registered places’, it said.

Luke Sibieta, author and research fellow at the EPI, said: ‘We know that the adverse effects of the pandemic will persist well beyond this academic year, so policymakers across the UK must look at providing additional catch-up funding over multiple years, with far greater levels targeted at the most disadvantaged pupils. Only then will we begin to meet the scale of the challenge posed by this crisis.’


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