The future of childcare?

A recent change to furlough guidelines for childcare providers has provoked uproar and concerns about the future of childcare.



On Friday, the Government tweaked its furlough guidance which had the effect of reducing the amount of money childcare providers can claim from the scheme.

Previous guidance said nurseries and other providers could continue to receive ‘free entitlement’ funding for children not attending their setting during the pandemic [ie the 15-30 hours childcare for two to four year olds] 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, on Friday this was changed and it now lists 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 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.

Childcare providers, who have for many months been saying underfunding of the free entitlement scheme is causing severe financial difficulties, say they had budgeted for access to the furlough scheme and are now forced to make some difficult decisions about redundancies and potentially closure.

The Government, on the other hand, says it is providing loans and continuing to fund ‘free’ places to help childcare providers. While the ‘free’ funding is useful, I’ve spoken to nurseries who are on their knees – loans are out of the question as they have no idea when they will be able to pay them back. They argue that they are not just another business, but provide crucial business infrastructure.

Vital infrastructure

The pandemic has highlighted the vital role childcare plays in getting people to work. We have received many, many emails from parents who are struggling with childcare – either they are trying to work from home with children present, are key workers who face childcare issues because their provider is not open or is not open for the hours they need such as night shifts or are being forced to go to work by their employer when there is no childcare provision available unless you are a key worker.

In the absence of being able to rely on grandparents, as so many do normally, what can parents do? Flexing hours might work if you work from home, but even so, the likely result, with small children, is that less work will be done, making parents appear like some kind of liability, even when what they are doing is like climbing Everest compared to those who only have to focus on the foothills of working in a different location from usual.

When lockdown is over, will those of us fortunate enough to still have jobs be able to do them? The jobs market will have changed from one where candidates call the shots to the opposite. The emphasis will be on rebuilding the economy – all hands to the deck. What will that mean for parents, particularly for women, given they are still most likely to be the main carers?

Our surveys have shown relentlessly that there are two main barriers to returning to work after parental leave – one is a lack of flexible working; the other is a lack of affordable childcare. It still seems to be women who are most likely to be affected, but that is changing. Flexible working is a relatively cheap thing for the Government to promote, which is perhaps why it does so – it doesn’t have to do anything much except encourage employers to take it up. Childcare, on the other hand, requires long-term investment.

Making things more difficult for nurseries who are already struggling seems very short-sighted when key workers rely on them to get to work and when social distancing is likely to be in place for some time to come, meaning grandparents might still not be an option. And what about after that? Until childcare is recognised for the key role it plays in our social and economic infrastructure – its role in increasing productivity, to put it in economic terms –  then the country will surely not be able to benefit fully from all the skills its citizens have to offer.

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