Response to the Spending Review 2020

The Chancellor, Rishi Sunak has delivered the spending review as the UK faces a harsh economic emergency.

The “economic emergency” caused by the pandemic has only just begun, according to the Chancellor as he warned that there would be significant lasting damage to growth and jobs.

Official forecasts now predict the biggest economic decline in 300 years and the economy is expected to shrink by 11.3% this year.

The pandemic has already caused job losses but the Government’s independent forecaster, the Office for Budget Responsibility (OBR) expects the number of unemployed people to surge to 2.6 million by the middle of next year.

As the Chancellor announced spending, the early years sector looked to more support after months of being on the frontline. However, the Government stated that it will invest £44 million in funding for early years education in 2021-22 to increase the hourly rate paid to childcare providers for the government’s free hours offers.’ This is down from the 2019 Spending Review that announced £66 million.

Purnima Tanuku OBE, NDNA’s chief executive said

‘We welcome any increase in investment for the early years sector by the Chancellor. A further £44 million amounts to an increase of just over 1.2%. However, this won’t help providers meet all the rising costs of delivering the government’s childcare policy while also responding to the pressures of the current pandemic.

Childcare providers, who have worked so hard throughout the pandemic for parents, key workers and vulnerable children, deserve support and recognition. Childcare places will be essential in any economic recovery, but this won’t be possible if those who deliver these places are put into financial hardship.

Nurseries are facing a double whammy of reduced income and maintaining measures to keep settings as Covid-secure as possible.’

Neil Leitch, chief executive of the Early Years Alliance, said:

‘While we welcome any new support for the early years sector, at a time when so many early years providers are on the brink of closure, it is frankly insulting that the government is continuing to tinker at the edges rather than committing to properly funding early years provision in this country

‘With the Treasury today committing to billions of pounds in spending on schools, it has to be asked: is this the best that we can do for our young children?

‘Nurseries, pre-schools and childminders have been on the frontline throughout the pandemic, providing quality care and education in the most challenging of circumstances – but that harsh reality is that without a substantial investment into the early years sector, we will start to see providers shut their doors, parents lose vital childcare and children prevented from accessing critical early education.

‘For the sake of providers, children and families across the country, we urge them to rethink this decision, and commit to providing the significant investment that the sector actually needs.’

June O’Sullivan, CEO of London Early Years Foundation (LEYF):

‘It is clear we are still not recognised for our contribution to the national infrastructure. Its seems unfair that  despite all our help during Covid, schools get £2.2 billion and we get a fraction of what we need. Despite all the research both educational and economic we still have a DfE that cannot get the support of the Treasury. Maybe they need to understand the issue better. What is clear to me is that we need a different conversation to avoid the road the madness.’

Courteney Donaldson, managing director of Childcare & Education, Christie & Co, commented:

‘During today’s Spending Review, Rishi Sunak announced a 2.2% increase in the UK National Living Wage, taking it to £8.91. This is very positive for child sector workers, however, adequate funding needs to be provided by government to providers. The nursery sector has been underfunded for many years and financial sustainability has been further compounded by the coronavirus pandemic.

‘Many early years providers across the country have operated at notable losses this year due to the initial lockdown which commenced in March. While being permitted to reopen to the wider public during early summer, the cost of delivering childcare has significantly increased during recent months and the funding shortfall has widened at an alarming rate.

‘Sunak said that the health emergency is not over yet and the economic emergency has only just begun. Early years childcare settings were pivotal at the beginning of the pandemic, as they provided support to front line and key workers, and they are absolutely fundamental in assisting the recovery of the UK’s economic condition. The sector needs to be truly recognised for the phenomenal contribution that it has made and the underfunding that it has received over many, many years needs to be adequately corrected, now more so than ever.’




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