What has been the effect of Covid-19 on Early Years providers and what should the government do about it?

By Dr. Jake Anders and Dr. Laura Outhwaite

It is estimated that 2.1 million children under the age of 5 access Early Years care. These early years of a child’s life are fundamental to their development, learning, and later life outcomes. Children who receive high-quality early education and care, and have a good level of development by age 5 years, go on to achieve good levels of academic achievement at age 7 and beyond. As such, high-quality early years provision is vital to addressing educational inequalities and has benefits for wider society and the economy. For every £1 invested in quality early education and care, £13 in future costs is saved for UK taxpayers.

In England, early education and care is provided by multiple stakeholders including group-based providers (66%), school-based nurseries (20%), and childminders (14%). Despite the range of benefits to the child and society, research shows Early Years workers are widely underpaid and undervalued: research carried out by the Education Policy Institute (EPI) before the Covid-19 pandemic found that the mean average hourly salary ranged from £8.30 in group-based provision to £15.10 for reception staff. However, 10% of staff in group-based providers received pay below the National Living Wage of £7.20 for workers aged 25 and over, which was made mandatory in 2016. In 2018, 44% of childcare workers claimed additional state benefits or tax credits to support themselves and their families.

The pandemic has only exacerbated such issues. While the government furlough scheme has protected jobs in this sector, the 80% salary coverage for those on already low pay has meant that many Early Years workers may find themselves with insufficient income to make ends meet. A recent analysis by EPI highlights that this has meant that the retention of workers within this sector is drastically falling, with many workers turning to other industries, such as retail, to provide financial stability.

But the current situation has also hit the Early Years sector from a business perspective. Before Covid-19, the Early Years sector was already experiencing issues of increased funding pressures, which were filtering down to increased costs for parents. This has been exacerbated by the pandemic: research by the Sutton Trust shows two thirds of Early Years providers were closed during the lockdown, with low-income areas of the country hit hardest, and ongoing capacity constraints are likely to mean that some no longer see a path to fiscal sustainability and will remain closed for good.

Given how important high-quality early years provision is, as both a vital part of supporting children’s early development and to support their parents’ ability to return to work, it is striking that plans to support the Early Years sector are largely absent from the government’s Covid-19 catch-up funding for schools. The Sutton Trust has set out what a similar package for the Early Years sector could look like; recommending an £88million package, including transition funding to see practitioners through these especially challenging months, and the introduction of an Early Years Pupil Premium available to providers serving children from low-income families.

The government’s response to both new and ongoing challenges faced in the Early Years sector has been widely criticised both before and during Covid-19. In particular, the Social Mobility Commission highlighted in their report earlier this year that the government has made little to no action on developing and delivering ‘a coherent and long-term early years strategy focused on improving outcomes for the least advantaged, since 2013’. It is vital for children, parents, the economy, and our society that immediate and lasting actions are taken to address this. The longer the sector does not receive such support, the harder it will be for it to recover, and the more children will go without the important developmental support that we know high-quality early years provision can bring.