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Temporary Changes in Funding to Support Childcare Providers in England

Author: cheqdin
Published Date: March 25, 2021

The latest announcement from the Department for Education could bring a slight respite for childcare providers across England. As opposed to calculating funding based on headcount taken at the start of the year, early years providers will receive funding based on actual attendance numbers during the summer and autumn terms this year.

The temporary change in funding calculation is expected to help many childcare providers across the country as the headcount taken in January cannot be considered an accurate representation of attendance considering the spike in COVID-19 cases during that period.

Funding from local authorities

The Department for Education has confirmed that childcare providers will receive additional funding from their local authorities if they record a rise in the number of attending children during the spring term after the early years census in January. Top-up funding will be provided to councils that see a rising demand for childcare entitlement over the spring term. The funding will be capped at 85 per cent of their census level in January 2021.

Business Tax Relief

Nurseries in England will also recieve a business tax relief extension till the end of June 2021, followed by a two-thirds discount till March 2022.

Although the business-tax relief and funding changes have been welcomed by the sector, sector heads are also urging the Government to simplify the funding system to bring down the administrative burden on local authorities, providers and families.

The National Day Nurseries Association (NDNA) have also put forward a proposal to consider a single childcare account that will simplify the process and allow parents to remain in control of the support they receive for their children and direct it to their childcare providers.

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