Labour’s shadow childcare minister has warned that the government’s decision to withdraw furlough funding for early years providers will “cripple” nurseries and force many to shut.
On 22nd April, Tulip Siddiq urged ministers to rethink the decision and propose ‘a proper funding plan’ for the childcare sector. The warning from Labour’s Tulip Siddiq MP comes as an online petition calling on the government to reverse its decision to exclude early years providers from claiming 80 per cent of a furloughed employees’ wages received more than 160,000 signatures (at 27th April).
The Department for Education issued fresh guidance detailing which childcare employees would be eligible for the Coronavirus Job Retention Scheme (CJRS) on 17 April, less than 72-hours before claims applications for the scheme opened.
The government’s Coronavirus (Covid-19): financial support for education, early years and children’s social care states providers may only access CJRS funds “to cover up to the proportion of its paybill which could be considered to have been paid from that provider’s private income”. This means employers will be unable to claim for the percentage of income covered by government-funded “free” childcare places.
However, many nurseries have already furloughed members of staff and have closed after previous government guidance stated settings were eligible to apply for the furlough scheme.
Siddiq said these late change to the furlough arrangements has left the childcare sector “panicking”.
“Early years providers were struggling before coronavirus, and many now face an existential threat from the loss of parents’ fees in this crisis,” she said.
“I understand that ministers want to ensure businesses can’t profit from emergency support, but the funding that providers were led to believe they could access was a lifeline. “The decision to restrict this funding nearly a month after it was promised in full will cripple nurseries, many of which have already been forced to close. I fear the result will be many valued childcare workers losing their jobs and more providers being forced to shut completely, and perhaps permanently.”
“Childcare is the fourth emergency service in this crisis, and I know that the government does not want the early years sector which provides it to collapse,” she added.
“So I am urging ministers to rethink this decision and come forward with a proper funding plan to ensure that childcare providers can stay open and survive this crisis.”