Updated: Apr 10, 2020
Leading childcare platform, Yoopies, has spoken to over 300 childminders, painting a picture of heightened anxiety, financial dependence on the goodwill of parents and forced business closures in light of Rishi Sunak’s proposed “Covid-19 Self-employed Income Subsidy”. Yoopies is calling on the Government to reassess this scheme, to protect childminders and other self-employed workers during this difficult time. If the Government fails to support newer childminding businesses, we risk a childcare crisis by the end of the Covid-19 quarantine.
Thousands of Childminders ineligible for Grant:
As Rishi Sunak unveiled the Covid-19 package for self-employed workers, childminders sat anxiously on the edge of their seats. Initially, there was a sigh of relief: “80% of earnings to be covered by the Government, up to £2,500 a month for three months.”
Yet even “one of the most generous schemes in the world” should be taken with a pinch of salt. As more details are released, the reality is much colder: thousands of childminders are ineligible for sufficient funding as Sunak reveals the grant is only for businesses operating for more than one year. As a result, excluding 194,000 new self-employed workers in the last tax year.
For many newly registered childminders, this comes as a huge blow. After enduring registration costs, set up fees and a heart-wrenching wait from OFSTED to confirm their status, thousands of new childminders now risk losing their brand new business. One childminder explains, “I have spent a lot of money to open my business, around £2K for nothing, I feel like new businesses have been left out in the cold.” For an industry that has already lost 37% of its childminders in 10 years, the future of childminding is now bleaker than ever.
Sunak claims that self-employed workers will be able to rely on Universal Credit if they are not eligible for the grant, however, testimonials from childminders show a different story. Despite promising that UC claims should not take the standard 5-weeks, one childminder said: “I don’t get my first payment until the 27th of April. I’m grateful for the £94 a week, but considering I have no income, it won’t get me far.” Some families are finding themselves excluded from UC altogether, depending on the working situation of their partners.
Misrepresentation of earnings:
Childminding takes time to become profitable, when taking into consideration start-up costs and finding clients. As a result, younger businesses are subject to a misrepresentation of their current net value. One childminder comments: “I earned double in the 2019-2020 tax year, as like a lot of businesses they tend to grow. Being a new business, the only tax return I’ve completed was in 2018-2019, so whilst I will get something, this won’t accurately reflect my current earnings.” Another childminder suggested: “We can all prove projected income with contracts and invoices, why can’t this be considered?”
“Where do we turn for money?”
Childminders are resorting to asking the families that they work for to continue paying fees, or reserving their child’s place with a partial ‘retainer fee’ while their childminding business is closed, even if it’s only half of what they usually pay. However, some parents are reluctant to do this.
One childminder notes “Parents hear we are receiving 80%, which immediately puts them off wanting to pay me. However, the Government figure is generated by net profit, and 50% of this will go on unavoidable expenses and other bills, leaving me with very little”. For childminders with funded places, local authorities have pledged to continue payments, even if children are not being taken care of. However, the average funded rate in England is £4.86 per hour5, which has already been argued by the childminding industry as woefully inadequate. The reality is that childminders rely on non-funded hours in order to remain profitable, which are now impossible to get from Key Workers alone.
Franceca Chong, UK Country manager, concludes, “The industry has already faced an alarming drop in the number of childminders. We are therefore strongly urging the Government to assess its action towards a struggling, underfunded industry so that it can recover well after this crisis is over.”
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