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Welsh Government Childcare Providers Grant Frequently Asked Questions
[15/09/2020]

In supporting the Out of School Childcare Sector with Welsh Government’s Childcare Providers Grant, Clybiau Plant Cymru Kids’ Clubs has encountered several queries which have been relayed to Welsh Government.  Our questions and responses from Welsh Government are set out below and are in addition to the guidance document available alongside the application form and the Local Authority FAQs that have been circulated.  Our staff are also here to help you.  [14/09/2020]

 

Cardiff Office: info@clybiauplantcymru.org

Colwyn Bay Office: info-nw@clybiauplantcymru.org

Cross Hands Office: info-ww@clybiauplantcymru.org

 

Question

1.Net Income and Autumn term deficit: Can anticipated Autumn term deficit be considered when awarding funding?

Some Out of School Childcare Providers, cannot demonstrate a significant deficit prior to re-opening (or not as high a deficit as they are facing during the Autumn term) within the data requested within the application. In some cases, the Coronavirus Job Retention Fund provided a buffer against the financial blow of closure (although this funding did not cover everything). However, Settings are facing vastly reduced intakes now during the Autumn (due to delayed re-opening due to access to school sites/parents’ home working temporarily/ subsequent local lockdowns), and so the need demonstrated by the net income comparisons within the application is not representative of their imminent needs over the next term.

 

1.Answer

The purpose of the Childcare Providers Grant is to provide funding to those settings who were unable to access previous funding announced by UK and Welsh governments and is intended to help provide financial assistance for the period where the pandemic was at its peak and many settings either closed completely or reduced the number of children attending. In order to ensure a fair comparison and that we are providing the right level of funding, we must compare the same period for both 2019 and 2020. For businesses which started trading after 2 April 2019, a grant of up to £2,500 is available to help cover net losses incurred in April-June 2020 as a result of COVID-19.

 

I appreciate settings may have concerns around reduced attendance and their financial situation going into the autumn, but this grant scheme is not designed to address these. Business Wales contains comprehensive information on the wide range of support available to businesses, including financial support, and I would encourage all businesses to see what help is available. We will be observing the demand and supply over the autumn and will be considering the need for any further funding support.

 

Question

2.Net Income and Comparisons:  Can additional factors be taken into account alongside the net income figures when considering grant award?

Due to the financial year comparison, some Settings appear more sustainable through the calculations due to specific factors that are, again, not a true reflection of their sustainability going forward. One particular Setting in Neath Port Talbot was not eligible for SEISS and so was very relieved when the Childcare Provider Grant was announced. However, last financial year they purchased a large amount of equipment meaning that whilst they had a good income for the year, the outgoings impacted on the net figure. This year, they received some back dated income that they should have received in the previous financial year, and also had limited outgoings during lockdown which causes their net income from this year to look artificially high. There is room for some further information to be provided with grant applications, but the concern is that applicants will be rendered ineligible from the figures alone, without additional information being taken into account.

 

2.Answer

In situations such businesses should follow normal accounting rules and apply income to the year to which it applies, rather than the year to which it was received. That said, if the business is using the cash basis it is expected that they would follow the rules of that scheme and account for the income when it was received. In other words, they should treat income and expenses as they would do for their annual tax return. Similarly, if the business has incurred capital expenditure for equipment (as opposed to revenue expenditure, e.g. day to day running costs), the business may disregard these capital costs when working out their net income. However, the business will need to provide a calculation to the local authority to explain which income/expenditure they are disregarding or allocating to another year and explain why. Where they are unsure, local authorities may send cases to the TalkChildcare mailbox for a Welsh Government decision.

 

Question

3.SEISS: Is there any scope for sole traders who claimed SEISS being able to access the funding?

Some sole traders have expressed their frustration at not being able to apply for the grant. Whilst they have received SEISS, the sole traders who have contacted us have not been eligible for other funding (e.g. Business Rates Relief/ Economic Resilience Fund). SEISS has supported their own personal income during lockdown, but they face the same overheads (insurance, rent, consumables) as other Providers and also face the same anticipated deficit during the Autumn term due to lower numbers of children attending childcare.

 

3.Answer

There are childcare providers, mostly voluntary-run settings, which have been unable to access any funding at all, including SEISS.The main purpose of the Childcare Provider Grant is to address this gap and support those settings unable to access other non-repayable sources of funding. We understand recipients of the SEISS may be disappointed that they are not eligible, but we have limited funding available and need to support those settings who have not received any funding at all. The SEISS is now open for a second and final round of applications and sole traders need to see if they are eligible.

 

Question

4.Bounce Back Loan: Should the Bounce Back Loan be counted within ‘income’ in applications?

We welcomed the news that the Bounce Back Loan was no longer counted within the eligibility criteria for the grant. However, if Providers count this loan (which will need to be paid back) within their income calculations, this will negatively impact their grant award. One LA in SEW has informed a Setting that they may not receive the grant they have applied for, due to not including the Bounce Back Loan within their income. Should this be the case?

 

4.Answer

No, it should not be counted as income. Any funding which is repayable i.e. loans should not be counted as income for the purposes of the scheme. Non-repayable funding such as grants should be counted as income.

 

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