Childcare post-Covid: ‘the poorest areas will suffer most’

Early years education has been hard hit by Covid, but was already suffering funding challenges pre-Covid. A few months into the pandemic, researchers at the Institute for Fiscal Studies, the University of Birmingham, Frontier Economics, Coram Family and Childcare and the University of Surrey said some childcare providers could close as a result of  coronavirus and ongoing financial pressures, meaning a shortage of places once demand returns to “normal” levels. The National Day Nurseries Association says the rate of settings that are closing has increased by 66% since the introduction of the Government’s 30-hours funded childcare policy, which providers say does not cover the full costs of places and a recent survey conducted by the Early Years Alliance found 42% of childcare providers said there is a chance they will have to close their setting in the next academic year due to underfunding.  In the first of a series of articles on childcare during Covid, we talk to the CEO of a childcare provider group about her experiences over the last months.

Zoe Raven is CEO of Acorn Early Years Foundation which runs 13 nurseries across Milton Keynes, Northamptonshire and Bedfordshire. Before Covid, the nurseries were doing fine, but Covid hit them quite hard.  However, Zoe says that being part of a group has made it easier to cope with everything Covid has thrown at them. “If we were a standalone nursery I’m not sure we would have survived,” she says.

The reason they survived and were not as badly affected as many others is because they were able to subsidise those nurseries in worst hit areas. Zoe says that nurseries in the poorer areas were the most affected.

Being part of a group has also meant that they were better able to deal with the huge amount of paperwork associated with children and staff being sent home. “It’s really time-consuming,” says Zoe. “We have been able to use central staff to support our nurseries with this.”

There has been some support from Government, mostly in the form of loans, but mainly they have had to find creative ways to manage on their own. Nurseries have not, for instance, been able to furlough en masse when they were closed to all but key worker children and vulnerable children. Instead, they have to deduct furlough money from the money they got for three and four year olds so they don’t get two lots of public funding. Zoe’s nurseries were able to furlough a few staff. At the height of the pandemic, they were running at a loss and had to pair nurseries up together. They took out a 100,000 pound recovery and resilience loan which Zoe used to pay staff bills and which she needs to pay back this year or face a 6.5% interest rate. She says the recovery has been quite swift so she is confident they can recover.

2021

Zoe says the early part of this year was very stressful when infection rates were going up, nurseries were worried about staff safety and numbers and parents were keeping children off. Morale was very low across childcare organisations, she says, and the sector felt very undervalued, given schools were allowed to close to protect children and staff while nurseries couldn’t.

Zoe describes the chaos of the bubble system with entire bubbles, including staff, having to isolate if anyone tested positive, which meant children who were not in on the same day as the positive child or staff member also had to isolate because of a lack of staff. Managers had to cover for staff, but then if they were in a bubble where someone tested positive they too had to isolate.

Things have got better month on month since then, though, as infection rates have come down and the vaccination programme has ramped up. Zoe says parents have been very understanding and supportive when children in their child’s bubble have tested positive, meaning everyone has to isolate. Zoe is very clear that parents should not be charged if their children have been sent home. “They should not have to pay, but the problem is there is no financial support for childcare settings,” she says. Instead her company suggested a voluntary payment if parents were able to pay. Some parents continued to pay their normal fees as they were still being paid by their workplace. “We are a charity and they understand that we are not pocketing the money to go on holiday. We are just surviving,” says Zoe.

Staffing

Her biggest challenge at the moment is staffing.  She speaks of a sector-wide recruitment crisis. She hasn’t even been able to get agency staff recently. Part of the problem is a lack of people coming out of college with the relevant qualifications, the increase in people wanting school hours with few people wanting to work the 3-6pm shift and children requiring consistency of care. One of the biggest factors, however, is low pay, but Zoe says that raising salaries will have a knock-on effect on parents unless the Government starts covering the full cost of its ‘free’ childcare programme for three and four year olds. The long-term shortfall hits the poorest areas hardest. “In the affluent areas the money is just a subsidy, but in the poorest areas parents are 100% reliant on it. They cannot afford to contribute anything,” she says. “We operate a cross-subsidy model to the poorest areas. Without it we could not operate in those areas.”

She adds that she would hire more apprentices, but says the rules mean she can only take on people who have no previous qualifications so they exclude many older recruits who might be looking to switch career. Zoe thinks the whole system requires an overhaul. The problems are myriad: for instance, tax-free childcare is too complicated and there is no funding for parents of children under two which means women may be forced out of the workplace until their children reach their third birthday. She is also critical of the two-tier system where some parents can afford to pay for optional extras like different meals or extra activities while others are excluded. “It needs funding properly,” she says. “Otherwise nurseries in poorer areas will not be able to survive.”

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