Public Accounts Committee to discuss free entitlement concerns

PACEY highlighted the issue as part of its written evidence to the Public Accounts Select Committee, which members are due to discuss this week.

The committee is currently holding an inquiry into the free entitlement to early years education.

In its submission, which has been circulated among the MPs, PACEY states, 'The NAO report observes that local authorities have generally focused on improving the quality of existing early years providers rather than encourage new providers into the market.

'We would also like to make the point that the system in which many local authorities administer the early education entitlement actually serves to deter many providers from delivering it, particularly smaller groups settings and childminders.'

The association claims that many providers find the system 'does not work for them'.

It explains, 'Most are accustomed to weekly or monthly payments. Local authorities, on the other hand, generally dispense payments in arrears on a termly basis in line with school administration systems.

'With limited finances this significant payment delay can be challenging for small businesses with limited cash flow to operate within.'

The body recommends removal of the constraint, but goes on to say there is 'evidence of good practice'. PACEY told the committee some local authorities pay providers 60-75 per cent of the full payment up front, with the remaining 25-40 per cent coming at the end of the term. Others are paying monthly in arrears.

'All local authorities should consider the viability of providing monthly payments or at least consider how their payment systems can be improved to support settings' sustainability,'

The statement also highlights common complaints such as 'excessive paperwork, red tape and administrative errors'.

There have been 'numerous reports' of problems with sharing payments between two providers, for example a childminder and a nursery, the statement claims. 

In addition, settings have reported that local authority decisions to increase their hourly rate by 1p or 2p has negatively impacted on settings who are forced to pass on to families the expense of notifying them.

PACEY is calling for local authorities to improve their interaction with early years settings 'on many levels' and 'recognise they are dealing with small businesses that need reduced burden to encourage them to support delivery'.

It adds, 'In particular, local authorities need to review their administrative systems to ensure that registering to provide the entitlement is as easy as possible and that their payment processes are robust and supportive of small business needs.

'Government also needs to do more to work with local authorities to deliver effective systems that allow delivery of the entitlement to be easily shared between providers.

This applies both to payment systems but also information sharing, for example, on children’s progress. The early implementation pilots provide an opportunity to develop and share good practice.'

The organisation is also urging the Government to review and simplify the ‘basket of measures’ providers must meet locally to qualify to deliver the entitlement.

It submits, 'Whilst streamlined by the Department for Education a few years ago, some local authorities are continuing to require providers to jump through unnecessary and burdensome hurdles in order to provide funded places.

'For some, an Ofsted grade alone is not enough and additional requirements are placed on providers.

'This of course has to be balanced with ensuring quality for children and families but there are simpler ways to do this.'

It suggests the entitlement could be restricted to providers who have achieved a ‘good’ or ‘outstanding’ grade from Ofsted.

The committee is due to meet to discuss the evidence on Wednesday, 20 April.