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Early years nurseries could close after furlough cash U-turn

PUBLISHED: 17:18 22 April 2020 | UPDATED: 17:34 22 April 2020

Nurseries are facing a funding crisis after a change to guidance on furloughed staff amid the coronavirus lockdown. Picture: Getty Images

Nurseries are facing a funding crisis after a change to guidance on furloughed staff amid the coronavirus lockdown. Picture: Getty Images

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Nurseries could face closure after a government U-turn on guarantees of financial support for childcare providers during the coronavirus crisis.

There are fears many smaller nurseries coudl be forced to close and other to make staff redundant amid the oronavirus lockdown. Picture: PAThere are fears many smaller nurseries coudl be forced to close and other to make staff redundant amid the oronavirus lockdown. Picture: PA

In March the Department for Education (DfE) published guidance confirming that nurseries and other providers could continue to receive ‘free entitlement’ funding for children not attending and would also be able to benefit from the Coronavirus Job Retention Scheme.

As a result many nurseries have already furloughed staff or closed temporarily, but they have now been told in new DfE guidance that they will be unable to access both ‘free entitlement’ and furlough funding.

Early years leaders have warned the change will have a ‘devastating impact on childcare settings’ with some smaller nurseries facing closure and others being forced to make staff redundancies.

A petition calling for furloughed pay for all childcare workers has now been set up and has amassed 129,000 signatures in just a few days.

Staff at Traquinas Childcare with Carla  Ferreira and Paulo Meireles in 2017. Picture: Rebecca MurphyStaff at Traquinas Childcare with Carla Ferreira and Paulo Meireles in 2017. Picture: Rebecca Murphy

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Jonathan Tricks, operations director for Tom Thumb Group, a childcare company based in King’s Lynn that normally looks after around 300 children at three sites, said the new guidance is different to what they had been promised. He said: “We have placed roughly 35 staff members out of 40 on furlough. This after the government and the local council had repeatedly told us that we could use both.

“This avoided making any of our staff redundant but also meant that we could keep running with a skeleton staff providing vital childcare for NHS and key workers.

Traquinas Childcare in Thetford have been supporting families during the coronavirus pandemic despite being forced to close. Picture: Carla FerreiraTraquinas Childcare in Thetford have been supporting families during the coronavirus pandemic despite being forced to close. Picture: Carla Ferreira

“But this U-turn will see the permanent closure of many nurseries and as a result many hard-working and qualified staff being made redundant. Something we are now having to look at the possibility of having to do.”

He said the business would face a shortfall of £100,000 by September and is now exploring the options of a loan and is in talks with staff ahead of this month’s pay day.

Nurseries have had to make some tough decision during the coronavirus lockdown. Picture: Getty ImagesNurseries have had to make some tough decision during the coronavirus lockdown. Picture: Getty Images

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Alpha Nurseries, which runs Magic Tree Day Nursery in Dereham, Safe Hands Nursery and Oaks Nursery in Diss, The Willows in Downham Market, and Seashore Day Nursery in Lowestoft, has applied for an urgent £250,000 bank loan to pay staff.

David Finch, managing director, said the current financial position for his company was “serious”.

“It’s become very clear now there’s going to be a lot of casualties from this [coronavirus crisis], in the nursery industry and generally,” he said.

Carla Ferreira and Paulo Meireles, owners of Traquinas Childcare in Thetford, said even despite already furloughing staff, they “might not have a business to go back to” after being forced to close.

Ms Ferreira said: “We still have to pay rent, bills and everything else a month, they haven’t stopped.”

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Neil Leitch, chief executive of the Early Years Alliance, said: “For early years providers across the country who have already struggled for years as a result of government underfunding, to be told weeks into this crisis that the support they were promised may be far less than they were led to believe is a complete kick in the teeth.

“ What the government is proposing would have a devastating impact on childcare settings, and in the worst cases, could lead to permanent closures across the sector.”

A Department for Education spokesman said they would continue to fund ‘free entitlements’ for the duration of closures, even if children were not attending, and was also providing ‘significant financial support’, including a business rate holiday for many private providers.

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