Childcare settings ‘must be classed as vulnerable’ under new energy plan, say providers

The Department for Business, Energy and Industry has today (21 September) revealed its Energy Bill Relief Scheme which will see businesses and voluntary organisations, including childcare settings, offered wholesale discount on gas and energy prices if their bills “have been significantly inflated”.

It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.

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The scheme will cover energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period.

The government has pledged to publish a review publish of the scheme in three months to inform decisions on future support after March 2023.

The review will focus on identifying the most vulnerable customers and how the government will continue assisting them with energy costs, according to ministers.

The announcement comes after early years leaders warned settings faced a “catastrophic winter” with many providers facing closure due to soaring energy costs.

Analysis by the National Day Nurseries Association (NDNA) of government statistics on the closure of early years settings shows a 65 per cent increase in nursery closures between April and July compared with the same months last year.  

The NDNA has urged ministers to ensure the sector is included in the “vulnerable businesses” category to avoid further closures.

Purnima Tanuku, NDNA chief executive, said: “Although capping energy costs will help give certainty over what will be a very difficult winter, it cannot lead to a cliff-edge in six months’ time.

“Childcare businesses – which have been closing at an alarming rate - are absolutely fundamental both for children’s development and for parental employment. Due to their importance and the risks they face, they must be classed as vulnerable, so they get additional future support.

“On top of the energy they need to provide warm meals and nurturing and safe environments for our children, nurseries are also having to cope with high bills for food, staffing and other resources. They cannot keep increasing the fees to parents as they can’t afford to pay more either.

“Early years education and care is in a worse situation than most sectors because of chronic government underfunding for the hours it offers parents for free. We are seeing nurseries closing faster than ever with 65 per cent more nurseries closing during the summer term compared with the previous year’s summer. We are seriously concerned for the sector’s future.”

Neil Leitch, chief executive of the Early Years Alliance, added: “While a cap on the wholesale price of energy for businesses will offer some welcome respite for early years settings, the fact that the government has only committed to offering this support for six months will be of great concern to many providers.  

“Years of underfunding, rising inflation and rocketing energy costs has resulted in the closure of 4,000 settings in the last year alone – and without significant support over the long term, there is a risk that this trend will only continue. As such, it is absolutely vital that the early years sector is included on the government’s list of ‘vulnerable’ industries set to receive support after the initial six-month period has ended.  

“All too often during the pandemic, the early years sector was overlooked, forgotten and omitted from vital business support schemes, resulting in many unnecessary and preventable closures. It is critical that the government doesn’t make the same mistake again.”