Nursery schools give children the best start in life.  After years of chronic underfunding, exacerbated by the Covid-19 pandemic, the very survival of nursery schools and the sector is under threat. 

We are calling for: 

  • Immediate provision of emergency funding to cover additional costs incurred due to Covid-19. 

  • A long-term funding formula for maintained nurseries and the early years sector to maintain funding and cover additional costs. 

  • Funding allocations  maintained for nurseries on 2019/20 pupil numbers until the pandemic is over.

What you can do

    Write to your MP   Tweet your MP

    Early years in January 2021 

    Nurseries, pre-schools and childminders have been struggling to survive during Covid-19 for reasons listed below.  They have not recovered from the impact of Covid-19 and a fall in demand for childcare places since the first lockdown last March.  Now, the Government has decided to fund nurseries on actual numbers of children attending rather than continue to fund on pre-Covid-19 levels.  This is a problem because funding is based on the number of children in attendance, which is significantly lower because parents are not sending their children due to safety concerns or because their employment status have changed (homeworking).  Low attendance will mean that many nurseries will struggle to remain open. 

    The situation pre-Covid-19

    Maintained nursery sector (MNS) funding has been based on a stop-gap formula since the introduction of the Early Years National Funding Formula (EYNFF) in 2017. This used “supplementary funding” to nominally keep MNS funding at an equivalent hourly rate to that received in 2016-17, in recognition that the EYNFF would not be sufficient to meet the additional costs which MNS face as schools eg the employment of a head teacher and qualified teachers. This cash-limiting of funding at 2016-17 rates, with no inflationary increases, has effectively meant year-on-year cuts.

    Chronic insufficient funding from central Government means the hourly rate received by private nurseries often doesn’t cover the cost of providing childcare. This situation isn’t sustainable.  High operating costs, including business rates and increases in staffing costs, staff to child ratios and the administrative burden of delivering funded places and tax-free childcare and difficulties in recruiting staff are putting the nursery sector under considerable strain.

    During Covid-19

    The pandemic has made the situation worse.  Increased costs incurred to keep settings Covid-secure; not being able to access additional funding and resources extended to other education settings such as primary and secondary schools; and the loss of parental/additional income have only worsened the perilous funding situation the sector was already under.  During the pandemic the Government failed to:

    • Extend the business rates holiday to MNS.
    • Make access to Coronavirus Job Retention Scheme (CJSR) easier for MNS settings who are both state funded and dependent on private income.
    • Provide any additional funding to cope with added costs incurred by Covid-19, such as additional cleaning materials and cleaning staff.
    • Give early years access to the £1bn extra money for schools due to the pandemic.
    • Provide additional money to compensate for the loss of revenue from parent-paid fees and other income sources, which many settings have come to depend on


    Early years provision in England is a complex patchwork of different types of providers, financed by a variety of funding streams. This mixed market of provision includes private, voluntary or independent (PVI) settings, maintained nurseries, primary schools, children’s centres and childminders. The cost of early years provision is borne partly by parents and partly by Government, through a combination of demand-side and supply-side subsidies.

    Government subsidies for early years provision in England consist of both supply-side funding (free entitlement) and demand-side funding (childcare elements of working tax credit and universal credit; employer childcare vouchers and tax-free childcare).

    The amount of money that local authorities receive is based on a formula that combines a basic hourly rate with an additional needs factor. The additional needs factor is dependent on, among other things: the number of children with free school meals eligibility; whether children have English as their first language; and whether children are in receipt of the Disability Living Allowance. The basic rate and the additional needs factor are combined and then multiplied by an area cost adjustment to consider the differing costs faced by providers around the country.

    Local authorities are legally responsible for ensuring that every child that is eligible for the 15 and 30-hours free childcare entitlement can access a place.  Local authorities receive the funding from central Government to provide these places, and in turn, pass the funding they receive on to the front-line providers of childcare services.

    Early Years members' forum 

    We have created a mobilize group for NEU members working in the Early Years Sector.  The space is for members to talk about pedagogy, birth to 5 matters, recent events surrounding coronavirus and connect with other members within early years and share resources.  You can join the group here.

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