UK childcare sector on ‘brink of collapse’

An emergency bailout of the UK’s childcare sector is needed if nurseries and child-minding centres are to reopen, allowing parents to return to work, according to the Trades Union Congress.

In a report published on Thursday, the main umbrella group for unions said parents faced a “massive childcare challenge” in the coming months, since some nurseries would fall victim to the economic crisis, while others would only be able to open safely on reduced hours or with fewer places under social distancing rules. Many parents, women in particular, could lose their jobs or pay as a result, it said.

“Our childcare sector is on the brink of collapse — and it’s putting women’s jobs on the line,” said Frances O’Grady, TUC secretary-general.

The closure of schools and childcare settings has had a bigger impact in the UK than in many countries because an unusually high proportion, 70 per cent, of two-parent families have both parents in work.

Rising female employment has been accompanied by an expansion of state-funded childcare, with most working parents of three- and four-year- olds in England able to claim 30 hours of free childcare a week.

But many providers said that even before the coronavirus crisis hit they were under intense financial strain because government funding for the 30-hour entitlement did not meet the costs of provision.

Nurseries and self-employed childminders have now suffered big losses of income from fee-paying parents, many of whom do not plan to return yet even though nurseries are allowed to reopen.

Providers say their problems have been exacerbated by a lack of clarity over eligibility for the government’s furlough scheme: they believed initially that it would be possible to make full use of the scheme while receiving the usual funding for free hours. When they discovered this was not the case, many had already committed to top up staff wages or to waive parents’ fees.

The Early Years Alliance, which represents 14,000 members, said that almost 70 per cent of providers answering a recent survey expected to operate at a loss over the next six months, while one in four believed they were likely to go out of business within the next year.

Neil Leitch, chief executive of the alliance, said: “We have long been arguing that, without necessary financial support from the government, the childcare sector is at risk of collapse,” adding that “while an emergency cash injection would be a very welcome step, this could only ever be a short-term solution.”

The TUC said the lack of consideration of childcare in the government’s exit strategy had “left working parents, particularly mums, in a terrible bind” because many would be asked to return to work before they were able to do so, without the rights needed to protect their jobs or income.

It called for the government to keep a limited form of its furlough scheme in place as long as needed to support parents who were unable to return to work until schools and childcare settings were fully reopened. It also argued that staff should have a right to request flexible working from their first day in a job, and a right to 10 days of paid parental leave a year, to help them balance work and care.

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