Coventry Early Years - Moving Forward March ...
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Coventry
Early Years
Business Information for Childcare Providers
Sustaining a business in the new world
~ moving forward during the next phase of COVID19 ~
On 22nd February 2021 the Government announced a roadmap to recovery with schools returning
from Monday March 8th 2021. In the Chancellor’s Spring Budget extensions to furlough, business
rates holiday and SEISS where announced to support businesses through the next stage of the
recovery from the pandemic. An increase to the National Living wage was also announced and for
the first time, more younger people will be eligible, as the age threshold will be lowered from 25 to
23. In full, the increases are:
• National Living Wage (23+) to increase 2.2%, from £8.72 to £8.91
• National Minimum Wage (21-22) to increase 2%, from £8.20 to £8.36
• National Minimum Wage (18-20) to increase 1.7% from £6.45 to £6.56
• National Minimum Wage (under 18) to increase 1.5% from £4.55 to £4.62
• Apprenticeship Wage to increase 3.6% from £4.15 to £4.30
Full details can be found on the Government website https://www.gov.uk/government/news/uk-
government-announces-pay-rise-for-millions-of-people
Childcare providers will need to take time to contemplate the challenges and demands that the
COVID-19 pandemic continues to pose if businesses are to remain sustainable. Childcare providers
will need to consider creative business solutions if they are to ‘weather the storm’ as we continue
through the pandemic. This may for example, include a remodeling of the workforce or adapting
operational models.
Assessing finances - We strongly recommend that providers take time to assess their current
financial situation and forecast any future cost implications. We advise carrying out an in-depth
business forecast to identify the ‘break-even’ point. Operating below the break-even point, over a
prolonged period will have serious repercussions on the long-term sustainability of the business. A
‘ready reckoner’ is a useful tool which will help to clearly identify expenses, income and ‘breakeven’
point. We are currently finalising a business toolkit, to be launched Spring Term 2021, to support you
in assessing and maintaining your future sustainability.
To help support you at this time and moving forward, Coventry Early Years are offering Business
and Marketing training. Information relating to these and all other courses can be found in the Early
Years Training directory.
Funding Guidance - A brief overview of some of the Government funding schemes can be found
below. You can watch videos and register for free webinars to learn more about the support available
to help you deal with the economic impacts of coronavirus. Full details can be found by following the
links below.
• financial support for education, early years and children’s social care
• check if you can claim for your employees’ wages through the Coronavirus Job Retention
Scheme
• use of free early education entitlements funding during coronavirus (COVID-19)
© Coventry City Council 2021. All rights reservedBusiness rates holidays - The government will continue to offer 100% business rates relief after
1 April 2021, with the relief extended until 30 June 2021. The Treasury has confirmed that
"nurseries will also qualify for relief in the same way as other eligible properties".
Private early years and childcare settings are eligible for a business rates holiday, that means
➢ nurseries which are eligible for a charitable status relief will also not be charged business
rates in 2020 to 2021
➢ some settings that operate from shared spaces which may now benefit from a 100% rates
relief. The Government is strongly encouraging the landlords of shared spaces to reflect any
business rates saving in their rent charges.
The Business Interruption Loan Scheme will be interest-free for 12 months, an increase from 6
months. VAT payments due with VAT returns between now and the end June 2020 were deferred
meaning UK VAT registered businesses will not need to make those payments until March 2021
Self-Employment Income scheme (SEISS) - The governments support scheme for the self-
employed (SEISS) will also be extended until September 2021 and include those who became self-
employed in 2019-20 and were previously ineligible for support. Providers who are self-employed
may be entitled to a grant from the Government if they are struggling financially due to coronavirus.
The details of how the Self-Employment Income Support Scheme (SEISS) works and who can and
who can't get the grants is included in the previous link. Once you can confirm you are eligible, you
must also be able to declare that your business has been "adversely affected" by coronavirus. The
Government guidance on the next phase of the SEISS can be found here.
A ‘test and trace’ one-off payment of £500 can be applied for if you are on a low income, cannot
work from home and have lost income as a result. In March 2021 this was extended to include
parents of self-isolating children. Details on how to claim this payment via Coventry City Council
can be found at https://www.coventry.gov.uk/testandtracesupportpayments
Bounce back loan - A further extension, until the end of March 2021, has been granted to apply
for the Government ‘bounce back loan’. “If your small to medium-sized business (SME) is affected
by coronavirus, you may be able to borrow between £2,000 and £50,000 through a Bounce Back
Loan scheme [the maximum is 25% of turnover]. The government will guarantee 100% of the loan
and for the first 12 months you will not have to pay any fees or interest or make repayments. You
may be eligible for this scheme if your business: is based in the UK; has been negatively affected by
coronavirus; was not an ‘undertaking in difficulty’ business on 31 December 2019.” This includes
self-employed people. There have been some recent amendments to the bounce back scheme
regarding repayment periods and payment holidays, you can find an overview by following the link.
If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top
up your existing loan to your maximum amount. You must request the top-up by 31 January 2021.
Coronavirus Job Retention Scheme (CJRS) - The Coronavirus Job Retention Scheme (CJRS), or
furlough, will be extended until the end of September 2021. The scheme was previously due to
close at the end of April but the Government recognises that many sectors are still facing
challenges due to the pandemic. From July onwards, employers will be expected to pay for 10% of
workers’ wages, rising to 20% in August and September. A step-by step guide for employers
can be found here.
Businesses will have flexibility to bring furloughed employees back to work on a part time basis or
furlough them full-time, and will only be asked to cover National Insurance and employer pension
contributions which, for the average claim, accounts for just 5% of total employment costs. Early
years providers’ access to the Coronavirus Job Retention Scheme was updated on 17 December
2020 to reflect the interaction between the Coronavirus Job Retention Scheme (CJRS) and 2021
spring term funding. Arrangements remain as published.
Employers can furlough employees for any amount of time and any work pattern, while still being
able to claim the grant for the hours not worked. Employers small or large, charitable or non-profit,
are eligible for the extended Job Retention Scheme - up to 80% of current salary for hours not
worked, up to a maximum of £2,500.
© Coventry City Council 2021. All rights reservedJob Support Scheme - The launch of the Job Support Scheme has been postponed because of
national developments related to the coronavirus pandemic. Additional guidance can be found here.
The government confirmed plans to introduce additional support for businesses hit by Tier 2
coronavirus restrictions and made changes to the Job Support Scheme, due to replace the current
furlough scheme in November, however with the announcement of the extension to the current
furlough scheme The Job support scheme will not come into force until the furlough scheme ends.
The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower
demand over the winter months due to Covid-19, to help keep their employees attached to the
workforce’. The new changes are:
➢ A more generous version of the Job Support Scheme. Employees need to work 20% of
their usual hours to qualify for the scheme and employers will need to pay 20% of hours
worked and 5% of hours not worked. The scheme is open to all businesses that can show
the impact of Covid-19 on their revenues, regardless of local Tier.
➢ A new grant scheme for businesses affected by Tier 2 restrictions, even if they have not
been forced to close, worth up to £2,100 a month for businesses facing lower demand or up
to £3,000 for businesses forced to close. Local authorities will be given instructions on how
to distribute these funds, which can be backdated to August 2020, although they are
primarily aimed at the hospitality and leisure sector. The Business Interruption Loan
Scheme will be interest-free for 12 months, an increase from 6 months
➢ Grants paid through the Self-Employed Income Support Scheme will cover up to 40% of
previous earnings, increasing from a maximum of £1,875 to £3,750. There will be two further
grant payments between November 2020 and April 2021. Grants will also be available for
those who are ordered to temporarily close or are facing significantly reduced demand in all
Tier areas.
Another benefit on offer is the Job Retention Bonus. This is a one-off payment to employers of £1,000
for every employee who they previously claimed for under the scheme, and who remains
continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a
month on average between the 1 November 2020 and 31 January 2021. Employers will be able to
claim the Job Retention Bonus after they have filed PAYE for January and payments will be made
to employers from February 2021. The Job Retention Bonus will no longer be paid in February, as
the CJRS has been extended until the end of April 2021: read further details about the extension
With the changes to furlough arrangements and the easing of lockdown, providers may need to
consider how to manage the return to work of those employees currently on furlough.
This may include considering:
➢ Is demand for childcare places likely to rise and therefore more staff
needed to meet parental demand
➢ Whether the Jobs Support Scheme can be utilised in your provision
➢ Amendments to contracts of employment to cover future COVID-19 situations
➢ Reviewing job descriptions and personnel specifications to ensure
supplementary roles and responsibilities are included
➢ Providing clarity on the process to be followed if a member of staff is
required to quarantine when returning from a holiday
➢ What payment will practitioners receive if ‘self- isolating’ following
an enforced nursery closure
Apprentices - The Treasury will also be increasing payments to employers who employ
apprentices with a payment of £3,000 for each new apprentice hired between 1 April
and 30 September 2021.
© Coventry City Council 2021. All rights reservedFree impartial advice is available from ACAS, who have also produced a useful ‘Return to work’
roadmap. The roadmap identifies the considerations that will need to be made at each stage of the
process. If your business employs the services of a Human Resources consultant, remember they
are there to provide advice to the business, in relation to the correct procedures to follow.
Managing the market - Some pertinent questions to consider are;
➢ How has demand or parental preferences changed and what steps might you take
to respond to this change?
➢ What are families now asking for?
Childcare providers will need to be more creative in business modelling to meet changing parental
preferences. Possible responses to this may include – ‘stretching funding’, increased flexibility in
patterns of attendance or actively managing current vacancies to maximise staff/child ratios across
the week.
Establishing parental demand:
➢ Compile a questionnaire to find out if the needs of existing parents/carers have or will alter
in the new term.
➢ If you operate from a school site, you could compile a short questionnaire for parents of
reception children to find out what pre-school provision parents used and why your provision
was not an option e.g. opening hours? cost?
➢ Have a conversation with parents/carers about how their individual needs can be met and
highlight a flexible offer.
Make savings by reviewing annual / monthly contracts with external suppliers - Is it time to
review energy, broadband or insurance tariffs? Do you contract out some services, such as cleaning
or the provision of meals for children? A few simple phone calls or on-line searches could reduce
some of these payments or secure a more competitive service.
Advertising and Marketing - Parents and carers need to have access to the most up to date
information if they are to be successful in selecting a childcare provider that meets the needs of their
child and family. Ideas to increase occupancy might include;
➢ Regularly update information held on the Family Information Directory (FID) website. For
example, with the latest contact details, opening hours, fee structure, vacancies etc. You can
update your FID information here
➢ Use social media to market the provision
➢ Use marketing materials to highlight how the provision is COVID secure
➢ Upload virtual tours or create a YouTube video of your provision for prospective parents or
carers to view
➢ Highlight how the outdoor environment is utilised
➢ Conduct induction visit for new parents in line with government guidelines
➢ Use Department of Works and Pensions (DWP) data to target promotional activities for
eligible funded two-year-olds. Childcare providers can access a list of street names showing
the current concentration of children eligible for two year funding, here
➢ If you do not already do so, consider offering Early Education Funded places for 2, 3 and 4
year olds. Offering Early Education Funded places is likely to attract a wider cohort of
parents/carers, particularly as many parents can now access up to 30 hours of funded
childcare provision. It is also worth remembering that funded hours can be shared across
more than one provider and this in itself, may support a revised business model at this time.
➢ Register for the Tax-free childcare scheme. This is an initiative whereby the Government
subsidises childcare costs for children ages 0 – 11 years (16 years if disabled)
➢ Consider working in partnership with local schools to offer before and after school provision.
Some schools are unable to offer the same level of provision across the day as a private
provider and so may welcome a joint working arrangement for children who need care before
and/or after school.
© Coventry City Council 2021. All rights reservedFee charging policy during COVID-19 - These past months have presented unprecedented
challenges, which have required childcare providers to consider how to remain sustainable in the
event of future lockdowns or isolation periods when children cannot attend the provision for their
usual hours. Many providers will have made changes to their fee structure, for example by requesting
retainer fees. However, providers need to ensure they are operating fairly and in-line with consumer
law. Some providers have been challenged in relation to their charging policy practice and this has
resulted in a legal requirement to repay fees to parents. The Competitions and Marketing Agency
(CMA) has published an open letter and more detailed advice highlighting practices in the early years
sector it considers unfair contrary to consumer law.
Business interruption insurance - For childcare providers which have a policy that covers
government-ordered closure and unspecified notifiable diseases, the government’s social distancing
measures may be sufficient to allow businesses to make a claim against their insurance, provided
the other terms and conditions in their policy are met.
The Financial Conduct Authority (FCA) rules require insurers to treat customers fairly, including:
➢ handling claims fairly and promptly
➢ providing reasonable guidance to help a policyholder make a claim
➢ not rejecting a claim unreasonably
➢ settling claims promptly once settlement terms are agreed
The government is working closely with the FCA to ensure that the rules are being upheld during
this crisis and fully supports the regulator in its role. The Association of British Insurers (ABI) and its
members have agreed a set of principles for handling business interruption claims to support and
provide clarity to customers.
Customers who feel they have not been treated fairly should:
➢ first make a formal complaint to their insurer
➢ refer the matter to the Financial Ombudsman Service if they do not feel that their complaint
has been dealt with satisfactorily
Businesses that have not purchased the appropriate level of cover should seek assistance through
the government’s wider support package if they are in financial difficulty. This includes measures
such as business rates holidays, small business grants, and the CJRS.
© Coventry City Council 2021. All rights reservedYou can also read
