Childcare providers concerned about furlough guidance changes

Childcare providers are angry about last-minute tweaks to government advice on its furlough scheme and how it applies to them.

Small child playing with brightly coloured bricks on the floor in a childcare setting


Childcare providers are concerned that changes to the government guidance on furloughing workers could leave them out of pocket and make it harder for them to furlough staff, with more than 70,000 people having signed a petition against them over the weekend.

The Early Years Alliance, which says around 3,000 providers and parents have written to their local MP on the issue since Friday, accused the government of backtracking on guarantees of financial support for childcare providers during the coronavirus crisis, describing the updated guidance as a ‘kick in the teeth’ for the sector and warning that it is likely to lead to nursery closures and threaten the long-term viability of the sector.

Previous guidance said nurseries and other providers could continue to receive ‘free entitlement’ funding for children not attending their setting during the pandemic and that they would also be able to benefit from the Coronavirus Job Retention Scheme, which provides grants covering 80% of monthly salary costs for staff members employed but not working.

However, new DfE guidance on financial support for education, early years and children’s social care gives a number of instances where early years providers will not be able to furlough staff. It also suggests that in some cases, early years providers will only be able access the Job Retention Scheme “to cover up to the proportion of its pay bill which could be considered to have been paid for from that provider’s private income”, ie not the ‘free entitlement’ funding. The Alliance says that this means that many nurseries won’t be able to get full access to both schemes.

The guidance states that public sector organisations supported by public funding should not furlough staff. For those which have some private funding only those who cannot be redeployed during the pandemic and work in areas where they are not needed, do not look after key worker children, where their salary is not made up of public funding and who would otherwise be made redundant can be furloughed.

“Educational settings that are in receipt of some public funding should only furlough employees, and therefore 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
  • (where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child
  • the grant from the Coronavirus Job Retention Scheme would not lead to financial reserves being created.”

The Government says it is developing a tool to help childcare providers understand what funding support they may be eligible for.

Neil Leitch, chief executive of the Early Years Alliance, 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.

“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.”

He called for an urgent rethink so that childcare providers can fully access both schemes. He said: “Many childcare professionals are putting their own health and wellbeing at risk by continuing to work on the frontline during this pandemic to ensure that critical workers and vulnerable children have the childcare they need, while others who have taken the difficult decision to close are still working hard to support their families remotely. For the government to treat the sector with such a lack of respect and fairness at this time truly beggars belief.”

A Department for Education spokesperson said the Government was offering financial support to nurseries during the period of closures. For instance, it is continuing to fund the free childcare entitlements such as the 30 hours for three and four year olds and says it is providing “significant financial support, including a business rate holiday for many private providers”. Full guidance on provisions is available here.  In addition the Government says it is reducing some of  the requirements linked to the Early Years Foundation Stage framework.

It has also updated guidance on free childcare entitlements, enabling councils to be able to move around government funding for them in exceptional circumstances so they can redistribute it for the benefit of critical workers and the parents of the most vulnerable children when their usual arrangements are no longer possible as a result of coronavirus.

Comments [26]

  • Katie says:

    I work in an independent school as a part time year 2 teacher. My husband is the main earner. I have a 3 year old that usually goes to nursery and a 1 year old son who is usually looked after by a grandparent. I am being expected to go in on a rota basis to care for key worker children. The massive amount of online planning/marking/emails is also extremely difficult with two very young children. Can I ask to be furloughed as I have no childcare?

    • Mandy Garner says:

      Hi Katie,
      You could definitely ask your employer to furlough you, but they might not agree to do this. I would speak to them and explain the stresses you are under.

    • Plain Talking says:

      Am I missing something? The original furlough advice said understandably if you are still being funded by central government (free entitlement funding) you can’t furlough staff paid from said funding as in effect this is double funding I.e. you are still getting public funding even though the kids are not attending but you want to also get 80% of your staff’s wages paid? The idea is you pay staff normally paid from the free entitlement funding their wages as normal as your income is still coming in. Any staff paid from private income that is no longer coming in can be furloughed. So if 80% of your income is from government funding you shouldn’t furlough 80% of staff. Seems fair to me.

    • Anonymous says:

      Hi, I am getting redundant and my manager said I will get only one week pay which is next week. I started working there September 2019 and not sure of what’s my right. Can you help?

  • Jessica says:

    I have funding from the government for the Child care offer. Does this effect me as we are furlough at the moment and this is the only income we have.

    • Mandy Garner says:

      Do you work in childcare or are you a parent? If a parent, it would not affect you unless it forces your nursery to close or lay off workers in the longer term.

    • Anonymous says:

      Hi, I just wanted to ask a question my manager at my nursery said they have to redundant us as we don’t qualify for furlough scheme. I am really confused as I heard some of the nursery are receiving the furlough scheme then why we have to be redundant and manager always said that we will be on unpaid Leave till September/October time. I am really shocked why do we have to on unpaid leave for redundancy and is there any way we can find out if our nursery is receiving the money for furlough scheme but don’t want to pay us. 🤔

      • Mandy Garner says:

        Hi, You would have to ask them about this. The Government has recently changed the guidance about furlough for nurseries so they cannot furlough staff whose wages are covered by the early years funding as this is public money.

  • Ronnie says:

    Should childminders still be paid,if parents are paid by childcare credits then they should still pay their childminders .They will still want there places when this is over.

  • Kel says:

    Funded places are only a fraction of income nurseries can not pay all their bills and staff wages having lost over half of their income

  • Kel says:

    when funded places only cover around 30% of Some settings income like mine, how can I pay out 100% of my monthly outgoings having lost 60% of my income ? The answer is I can not

  • Paul says:

    Spot on. Double claiming is a disgrace

    • Lucie coker says:

      Double claiming isn’t the issue….. we aren’t working, cannot work but won’t get paid. How is that spot on?? Will you pay for my children’s upkeep and my household bills???

  • Debbie says:

    Children 3 + might be government funded but most nurseries cannot survive without the pay from the parents of babies and toddlers as well. This drastic u turn means 3 quarters of the staff in the nursery I work in have been made redundant leaving some very dedicated early years educators wondering how they will survive. Myself included.

  • peter day says:

    My daughter works in a nursery and is furloughed at the moment. I don’t think it is publicly funded, but will she lose her pay.
    Worried DAD

  • Lindsay Bates says:

    After all this over, the main thing children will need is normality. Especially for good education in life.

  • iqbal says:

    the government have got this spot on if your getting the free entitlement which has covered your costs all this time and then the nurseries have the cheek to double up and create profits it was discusting. These places should be no profit organisations. hopefully a reshuffle once the virus is over

    well done to the govt on this one very happy

    • steve says:

      Abhorrent and disgraceful. This will affect those nurseries that rely upon public funding, funding that already isn’t enough for nurseries to survive on. A decision four weeks after nurseries have already furloughed staff. This hits the lowest paid workers and nurseries struggling to survive. Low paid workers will lose their jobs and nurseries will close – shameful!

    • Tina says:

      You dont even know what you talking about get your facts before you put such a post thank you

    • Anna says:

      Not all settings are the same I’m afraid. Small settings have few funded children and the cost to run it is high, I am sure fully funded settings should fall into this category but 50% of funding doesn’t cover the bills and staff wages for example in smaller settings, so if I would have to choose between a roof over my head and pay staff what government had promised they would cover… guess what would be my option. 😢

    • Rebecca says:

      Our free funding is covering mine and a couple of colleagues wages whilst we look after between 2 and 6 children daily for key workers. The furloughed staff need to be funded in addition to this.

    • Karen White says:


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