I think it is a little unclear at the moment - seems to be conflicting advice. This is from the Early Years Alliance - watching their site for any updates!
Whether early years providers can benefit from both the Coronavirus Job Retention Scheme and ‘free entitlement funding’
Department for Education guidance for early years providers published on 24 March 2020 states: “Providers can access [the Coronavirus Job Retention Scheme] while continuing to be paid the early entitlements funding via local authorities.”
However, concerns have been raised following general guidance for all businesses published by HMRC on 26 March 2020 which states: “Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.”
The Early Years Alliance is currently seeking urgent clarification from the Department for Education and the Treasury on both points, and will update the sector as soon as possible.