Furlough leave – early years sector

23 April, 2020

Updated as of 23 April 2020

The government has provided further guidance on how the furlough scheme will be applied to private sector employers who receive public funding, with some specific guidance for the education and early years sector,  one of the stated objectives of this being that “no organisation should profit from the exceptional financial support available and should therefore only access the support required”.


What does this mean for private nurseries who receive free early years funding from the government?

The government announced in March that it would continue to pay the free early years funding for 2, 3 and 4 year olds as well as providing access to the furlough scheme and business rates holiday. New guidance published on 17 April now clarifies this and sets out 5 conditions which a private provider must meet in order to furlough employees; one of those conditions is that the employee being furloughed is not involved in delivery of a provision that has already been funded. This may be difficult to ascertain but the guidance then states that the setting can access the furlough scheme to cover that proportion of its payroll bill which could be considered to come from its private income (ie hours paid for by parents). The government has asked that the settings look at income received in February to ascertain this for their first furlough claims.


Although it was announced yesterday (22 April) at the Education Select Committee meeting that this is not “a change in guidance”, the clarification on public funding and how it interacts with furloughing staff may very well cause difficulties for a number of settings who took the decision back in March to furlough staff on the basis of the earlier guidance and who are already struggling due to underfunding. This has led to some experts in the sector to claim that this could lead to closures and they are asking the government to urgently rethink its strategy given the key role such settings are playing to support key workers and to support a return to work for other working parents.