The financial impact is crushing the sector

The Covid-19 pandemic has caused significant strain on the childcare sector, which was already struggling pre-crisis. ‘A family stimulus: Supporting children, families and the economy through the pandemic’ report from The Trades Union Congress (TUC) and the Institute for Public Policy Research (IPPR) details the need for more funding.

It is not a surprise to anyone that the sector has a long history of underfunding. Childcare providers receive approximately one quarter of their funding from the ‘free entitlement’ – funding from the Department of Education for disadvantaged two year-olds and all three and four year-olds – with the rest coming largely from parent fees. It has been estimated that the funding shortfall per hour of childcare delivered through the free entitlement is between 37 and 20 per cent (Ceeda 2019).

Therefore, the sector depends heavily on income from parent fees to recoup these costs. This model is now crumbling due to the pandemic, but during the lockdown the early years sector played a vital role on the frontlines.

According the report it has been estimated that during this period, childcare providers in England lost up to £228 million – or 13 per cent of the sector’s total income (Blanden et al 2020). Since then parental demand has remained lower than normal, including due to limits on the number of childcare providers who can deliver places due to Covid-19 restrictions.

Purnima Tanuku OBE, chief executive of National Day Nurseries Association (NDNA), said: ‘This report is right to highlight the lack of support to the early years sector throughout the pandemic and the vital role the sector plays in the life of children and families.

‘We have been calling for recovery funding to support the sector since lockdown measures were introduced. Evidence shows that nurseries have lost money throughout the pandemic through reduced parental income at a time when they have invested in increased safety measures.

‘The Government needs to get the funding right for early years to be able to level up opportunities through high quality, early education. The Chancellor has a Plan for Jobs but if parents are to be able to return to work or retrain, there must also be an urgent Plan for Childcare.’

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