Around one in five early years settings were set to furlough staff despite many nurseries reopening – and more redundancies could be on the horizon, a report suggests.

Approximately 4% of early years workers have been made redundant during the pandemic, according to joint research by the Education Policy Institute (EPI) and National Day Nurseries Association (NDNA).

The childcare staffing crisis could worsen when the furlough scheme comes to an end next month and some nurseries may be forced to close their doors, the think tank has warned.

The research found that around three in four (71%) of early years staff were furloughed between March and August and 18% of workers said they were due to remain on furlough between August and October.

There are indications that the size of the workforce is “shrinking”, with settings reporting employing 9% fewer staff in August than they had in March, the report suggests.

One in five staff remain on part or full time furlough, suggesting that come the end of the scheme in October, we can expect even more redundancies than we have seen to date

It comes after nurseries in England were forced to close in mid-March due to the lockdown.

All children were allowed to return to nursery from June 1, but attendance has remained low in some settings.

The latest Department for Education (DfE) figures suggest around 619,000 children attended early years settings on September 17 in England, which is around 47% of children who usually attend childcare in term time.

The survey, of more than 400 early education and care providers in England, Scotland and Wales in August, found less than half (48%) of settings said they take qualification levels into account when making furloughing decisions, compared to 68% of settings which take experience into account.

Dr Sara Bonetti, director of early years at the EPI think tank, said: “In spite of most settings reopening from June, one in five staff remain on part or full time furlough, suggesting that come the end of the scheme in October, we can expect even more redundancies than we have seen to date.”

She added: “To avoid the closure of early years providers and to protect the quality of early education and care for families in the long term, government support for the early years sector must be sufficient to ensure that workers with valuable skills and experience are granted the job security, pay and professionalism that they need and deserve.”

Purnima Tanuku, chief executive officer at the NDNA, said: “Prior to the pandemic the childcare sector was already facing serious workforce challenges but Covid-19 risks pushing this into a full-blown crisis.

“This is a time of great uncertainty for early years providers, staff and families.

“Childcare must be at the centre of any economic recovery as people look to return to work.”

She added: “High quality early education is crucial to giving every child the best possible start in life.

“Having a well-qualified, secure and motivated workforce is central to this quality of care and education.”

A Department for Education spokesman said: “This important sector has received significant financial support over the past months to provide stability and reassurance, and we continue to provide extra security to nurseries and childminders that are open by ‘block-buying’ childcare places for the rest of this year at the level we would have funded before coronavirus – regardless of how many children are attending.

“Providers will benefit from a planned £3.6 billion funding in 2020-21 for free early education and childcare places. From next year we will also be investing £1 billion to create more, affordable wraparound and holiday childcare places.”