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Government furlough u-turn presents a major challenge for the early years sector

The Government’s decision to backtrack on the amount of financial support that early years providers can access presents another difficult challenge for nursery owners to manage.

Coronavirus (Covid-19): financial support for education, early years and children’s social care says providers may only access Coronavirus Job Retention Scheme (CJRS) funds “to cover up to the proportion of its paybill which could be considered to have been paid from that provider’s private income”. This means employers will be unable to claim for the percentage of income covered by government-funded “free” childcare places. One nursery we have spoken to is now only able to claim 34% back to cover it’s paybill, with the figure varying from nursery to nursery.

The new guidance says that private providers should only furlough employees if:

  • The employee works in an area of business where services are temporarily not required and where their salary is not covered by public funding
  • The employee would otherwise be made redundant or laid off
  • The employee is not involved in delivering provision that has already been funded (free entitlement funding)
  • (Where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child
  • The grant from the CJRS would not duplicate other public grants received, and would not lead to financial reserves being created

However, many nurseries have already furloughed members of staff and have closed after previous government guidance stated settings were eligible to apply for the furlough scheme.

Help is available

There are measures you can take to protect the future of your business. We are working with several nurseries on managing their employees to ensure long term sustainability for the business.

Measures can include:

  • Temporarily reducing staff pay and hours
  • Requesting staff to use annual leave
  • Arranging training for staff during furlough

Our experts are only a phone call away if you would like to discuss the options, 0161 926 8519.

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