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NEWS: New guidance issued to LAs in England regarding funding entitlements

The Department for Education in England has issued new guidance to local authorities confirming that its current commitment to continue to fund early education entitlements at pre-pandemic levels will continue now until the end of the Autumn term in December. In recognition that the number of children attending childcare may not have returned to normal levels by early January when the 2021 census is due to take place, the final funding allocation to local authorities for the 2020 autumn term will therefore be based on their January 2020 census count.

The DfE continues to encourage local authorities to pass on that funding to registered providers, with one change to current guidance. Namely that, from September, the DfE is advising local autorities not to continue to fund childminders, nurseries and pre-schools that have decided to remain closed.

We are aware of a number of our members who are currently closed because of continued health concerns or because of lack of demand. This change to guidance comes with some notice and we hope gives them time to decide whether to re-open or not. Most providers who remain closed have told us they intend to reopen in September anyway.

Liz Bayram, PACEY Chief Executive, commented "With continued low numbers of children attending their services, childminders, nurseries and pre-schools are struggling to recover from the impact of the pandemic, so this extension of the DfE’s commitment to continue to provide pre-pandemic levels of funding for entitlements is to be welcomed. But without funding to support their long-term recovery and to address the increased cost of running services in a pandemic, the threat to sustainability remains. Recent Sutton Trust research revealed that nearly 70% of providers in deprived areas expect to have to operate at a loss for the next six months, with 42% of settings anticipating making redundancies. A third expect they may have to close within the year.

“So any help is to be welcomed and this continuation means providers adversely affected by future local lockdowns will still receive some support until January. However, we remain concerned that if the number of children attending doesn’t increase soon then we are at real risk of significant closures, particularly as furlough support ends both for childcare providers and, of course, for some working parents. We still need long term sustainable funding and clarity around how providers will be supported through future local lockdowns, if they continue into 2021.”

In Wales an announcement on the Childcare Offer funding from September is expected within the next week. We will share updates as these are published.