Pre-school Education: Finance

Department for Education written question – answered on 21st July 2021.

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Photo of Jon Cruddas Jon Cruddas Labour, Dagenham and Rainham

To ask the Secretary of State for Education, what assessment he has made of the financial effect of losing fee paying families on early years education providers during the covid-19 outbreak.

Photo of Vicky Ford Vicky Ford The Parliamentary Under-Secretary of State for Education

We have spent over £3.5 billion in each of the past 3 years on our early education entitlements and the government continues to support families with their childcare costs. On 25 November 2020, we announced a £44 million investment for the 2021-22 financial year, for local authorities to increase hourly rates paid to childcare providers. The Early Years National Funding Formula allocates our funding fairly and transparently.

Last year, when access to childcare was restricted to vulnerable children and the children of critical workers, the government block-bought early years places so that childcare providers received early entitlement funding even when children were not able to attend settings. On 1 June 2020, early years was one of the first sectors to re-open, and has been able to welcome all children to settings ever since. The government has also provided unprecedented support to businesses during the COVID-19 outbreak, through schemes such as the Coronavirus Job Retention Scheme. As a result, childcare providers have been able to furlough their staff whereby they have experienced a drop in their income from parents or government to help with staffing costs.

As with other sectors, the COVID-19 outbreak has been an uncertain time for childcare providers, with many reporting concerns about long term viability of their settings as a result. Our policy is to ensure that there are sufficient childcare places to meet demand from parents. Despite the level of uncertainty faced by providers over the COVID-19 outbreak, Ofsted data shows that as of 31 March 2021, the number of childcare places for providers on the Early Years Register has remained broadly stable since August 2015. This is in the context of declining birth rate (in 2019 there was a 12.2% decrease in live births since the most recent peak in 2012).

A recent survey by Ipsos MORI in March 2021 found that nearly nine in ten (88%) parents of 0 to 4 year olds whose child used formal childcare before COVID-19 reported that their child was using formal childcare at the time of the survey.

We liaise regularly with local authorities and they have not reported to us a significant number of parents unable to secure a childcare place, this term or since early years settings re-opened fully on 1 June 2020. Where parents have been unable to temporarily secure a childcare place (for example, due to their usual setting being temporarily closed due to the COVID-19 outbreak), this has been able to be quickly resolved locally, and local authorities are not reporting significant sufficiency of supply issues. We continue to work with local authorities and the sector to ensure there is sufficient, safe and affordable childcare for those who need it most.

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