I congratulate Fleur Anderson on securing and introducing this debate. As chair of the all-party group on childcare and early education, I want to make a brief contribution. I hope the hon. Lady will join the group. We look forward to having her as speaker at our next meeting. She will be very welcome.
On occupancy and demand for places, demand is, on average, 21% lower than it was in 2019. The Government had been basing early entitlement funding on pre-covid attendance rates, but it was announced just before Christmas that this would stop in the spring term. New guidance has not yet been issued on whether councils should continue to fund places for children not currently attending. That said, I was pleased to learn that Hampshire, my own county, said last week that it will guarantee funding until half term—which is good but obviously very short-term—whether or not parents decide to keep their children at home due to the pandemic.
More generally, I want to place on record a survey carried out in November by the excellent Early Years Alliance, which found that 56% of providers said that basing fees on current occupancy would have a negative or very negative impact on them. Of those, 45% said they did not think they would be able to remain viable for more than six months as things stand. This means that the decision to remove this support could result in some big closures by late spring. It is that urgent, remembering, as we do, that early years settings are open and allowing parents to go to work.
Turning to testing and vaccinations, it is hugely welcome, as the hon. Lady said, that early years staff will be offered asymptomatic testing. When she closes the debate, will the Minister provide some detail on when and how that will be accessible, what support and training practitioners will be offered with administering the tests; and, of course, how associated costs will be covered?
Some practitioners have been offered vaccinations by their local hospital. Some, obviously, will come within the first four groups, but that is not the case for all. Early years practitioners are bravely continuing to come into work, despite the current prevalence of the virus in society. In my opinion, they, along with other educators and critical workers, should be offered the vaccine as a priority in phase 2 of the roll-out. I made that point in this very Chamber yesterday, so I will not labour it again.
Thirdly, on self-isolation and covid in early years settings, we know it is a constant juggle for settings to remain open due to the number of staff self-isolating. Nurseries have had to form closed bubbles of specific staff and children, meaning that if there is a positive test in one bubble, the other children need to isolate. That obviously has an impact on parents, particularly critical workers, so I would argue that offering routine testing for the early education sector and prioritising it for the vaccine roll-out is key.
Furthermore, having a lot of staff self-isolating and testing positive also means that practitioners are struggling to maintain the important staff ratios. I have heard many nursery owners say that they are not clear whether, if they had to close due to a lack of available staff, they would lose their entitlement funding. They will typically also lose parent fees in this situation, which means that paying staff and keeping up with other costs, such as rent and utilities, becomes a real challenge.
It is important to note that for childminders, who are so often overlooked in this whole early years debate—I declare my interest, because I am married to one—a positive test will almost always mean the temporary closure of the entire business, which will have an impact on all those who rely on that childminder.
It would remiss of me not to mention the pre-existing funding challenges, which have already been touched on. They never went away and were, of course, the subject of the debate I led in this place last month. The early education sector was, I continue to argue, experiencing market failure long before the pandemic. Funding levels have not covered the cost of provision for many years. Ceeda, an excellent independent research company, has shown that even if occupancy levels were exactly the same now as they were in spring 2019, some 77% of childcare providers would still be coping with a shortfall of £2 per hour for every funded two-year-old, and 90p per hour for every funded three and four-year-old. That drag becomes a problem, and it is now a real problem.
I thank the Minister for the 1.2% increase in funding rates due to come into effect in April. However, in practice and at best, it equates to just 6p or 8p an hour per child for childcare providers across England—at a time when we should remember that the national living wage is due to increase by 2.2.%.
In closing, I still believe we need to commission an independent, meaningful review of early years policy and funding, to ensure that the gap between the costs of delivering early education and the rate paid per hour per child to providers is closed and eventually eliminated. If we do not do that, we are going to lose a lot of provision, which would serve nobody and would be the opposite of levelling up.
Finally, I want to say how sad it is that sittings in Westminster Hall will not continue after today if the motion tonight goes ahead. As a former Minister who has spent many hours sitting in this Chamber and responding to debates, I believe that good scrutiny leads to good policy and good government, and without it, we are all worse off.