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The impact of the furlough scheme on UK nursery settings

On Friday 26 March, the Education Policy Institute (EPI) and the National Day Nurseries Association (NDNA) published a new report on the impact of the pandemic on early years staff.

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The report shows that a lack of demand for early years education from families, and financial instability in the sector, led to almost 40% of early years staff being placed on full or part-time furlough between the months of November and February – that’s nearly four times more than the sector had previously projected for this period.  
Staff with the lowest qualification levels bore the brunt of disruption, as they were more likely to be placed on full-time furlough and are also at greater risk of having their hours reduced or being made redundant, with settings reporting that they consider staff qualifications and experience when making changes to their workforce.

The survey, which covers almost 800 private, voluntary, and independent (PVI) early years settings, representing over 15,000 staff, also reveals findings on the scale of closures in the sector during the peak of the second wave of the virus. As many as 72% of settings in England and Wales were forced into full or partial closures over the last few months, with children’s overall attendance around a quarter less than it was in the year before this, prior to the pandemic.

Courteney Donaldson, Managing Director of Child Centric Sectors at Christie & Co, comments on the findings:

“The UK nursery sector is subject to cyclical occupancy trends, with September ordinarily being the lowest point of occupancy for many nurseries and preschools, following the transition of preschool classes into schools. But, with occupancy levels heavily impacted by COVID-19, many settings reported a slow recovery between September and late November. While some nurseries saw a significant increase in pent up demand from parents keen for their children to return to formal childcare settings, we increasingly heard from operators across England that there had been a large shortage in the number of FEF children returning to settings, this will have further compounded challenges around occupancy for some nurseries and preschools.  

“Alongside operational challenges, and while a proportion of staff have been furloughed, the financial burden, heightened by FEF funding shortfalls has, for some, been further increased by additional expenses such as the purchase of lateral flow tests for staff, PPE and additional cleaning. Many are carrying these extra costs alongside fees being waived due to children, families and staff needing to self-isolate, so have had to take out additional loans and extended overdraft facilities in order to access sufficient cash-flow which, for some, places operations under unsustainable financial pressure.
“As we prepare to transition out of this latest lockdown, with great strides having been made in the UK vaccination rollout, tentative steps toward economic, business and educational recovery are being made. With such a large proportion of the UK's workforce having been furloughed at one point or another, and with significant changes to the way that business have operated during COVID, there are sure to be wider changes to the behaviour of UK workers. For example, many parents, who may have been office based pre-COVID, might not wish to return to office working five days a week, which could re-shape parents’ childcare needs, resulting in changes to occupancy utilisation trends.
“With some nursery settings struggling and a heavily impacted workforce, it’s hard to think that the past year, and beyond, won’t negatively affect young children’s development. With UK settings only being open to children of key workers for part of last year, with many children being looked after by parents juggling home-learning and their full-time careers, it’s important that, as children return to nursery settings, all settings have the capacity to cater for their needs. More so now than ever, early years funding shortfalls need to be fully rebalanced so that the sector can meet the costs of delivery; recruit, train and retain qualified staff and support children throughout their early years.”

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