Chancellor Rishi Sunak confirmed that the Job Retention Scheme will be extended to October.

Mr Sunak confirmed that employees will continue to receive 80% of their monthly wages up to £2,500. However, he also stated that in due course business will have to ‘start sharing’ the cost of the scheme.

Around 7.5 million people in total are now covered by the scheme.

Mr Sunak said: ‘I’m extending the scheme because I won’t give up on the people who rely on it.

‘Our message today is simple: we stood behind Britain’s workers and businesses as we came into this crisis, and we will stand behind them as we come through the other side.’

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA), said:

‘Today’s announcement will be a great relief to the dedicated professionals and employers in the early years.

‘Many nurseries, who were looking at June as the end of the Coronavirus Job Retention Scheme, will have been nervous about how they would be able to keep staff on with far fewer children attending.

‘A lot of childcare providers in Scotland and Wales have told us that they haven’t had enough children attending to be able to stay open, and with the current lockdown conditions extending, there remains concerns for their financial future. For those who are open we know that shielding and reduced demand mean not all staff are needed in settings.

‘We have just seen the government announce plans to get children returning to early years settings from the beginning of June in England, as long as it is safe to do so. However, we know that safety measures, shielding and reduced demand may mean not all staff will be able to return from day one. The extension of the scheme and the ability to bring staff back part-time will help childcare providers respond to increasing, but uncertain demand for childcare places. It will also mean that those staff who need to remain shielded, will be able to do this.’

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

‘While we welcome the extension of the Job Retention Scheme and the news that employers will be able to bring employees back part-time as of August, we remain incredibly concerned about the financial viability of the childcare sector, particularly over the next few months as providers look to potentially reopen.

‘With the initial demand for childcare places expected to be significantly reduced, and still no clarity from the government on whether existing support schemes for the sector will continue during this time, the outlook for many nurseries, pre-schools and childminders across England is very uncertain.

‘The government’s refusal to reverse its decision to limit how much support childcare providers can access via the Job Retention Scheme has already had a hugely damaging impact on the sector. It is absolutely vital, therefore, that the government confirms exactly what funding will be made available to providers to ensure they are able to stay afloat during this transitional period.

‘There are many significant financial challenges facing the childcare sector at the moment and the extension of the furlough scheme – while helpful – is, by itself, not the solution.’