Councils 'can transfer funding between settings' - new DfE guidance

The Department for Education said this morning that it plans to issue new guidance on the ‘steps [councils] will need to take if moving around government funding between settings’.

This temporary relaxation of the rules applies ‘where all other options have been explored’ and ‘more childcare places are still needed locally’ as a result of coronavirus. This could be where the child’s original setting has had to close.

The Early Years Alliance has said this 'essentially means councils will be allowed to give more funding to providers remaining open, and less to those who have been forced to close.' They have criticised the move, saying this is another example of the Government 'moving the goalposts for the early years sector at the last minute' and saying that it will unfairly penalise settings which have had to close.

In practice, councils are using a variety of different approaches which are creating a postcode lottery of support. While government has confirmed it will continue to pay local authorities for early years entitlement places in all settings, whether open or closed, Nottinghamshire is among those councils not paying free entitlement funding to settings taking on children from other settings, while settings in Surrey are being double funded for four weeks – i.e. the original and new settings both get funding for the same child.

Nottinghamshire County Council guidance says that, ‘We have pledged not to withdraw funding for 2, 3 and 4 year olds from providers, but we cannot double fund places –i.e. the funding will not move with the child. There is no additional funding coming in to the local authority to provide for this’.

Settings trying to balance huge losses in parental fee income with their free entitlement income have told Nursery World that not being paid for temporary children creates an incentive not to take them on.

Children’s Minister Vicky Ford said councils should now ‘use flexibility to redistribute entitlements funding in exceptional cases where other options have been exhausted, helping nurseries and other settings stay open and making sure enough childcare places are available.’

The Government also said explicitly that Coronavirus Job Retention Scheme (CJRS), which allows employers to furlough workers and have 80% of their wages paid, can be used to offset losses of free entitlement funding. 'Any setting which sees their early entitlement funding reduced in order to fund childcare places elsewhere will be able to increase the proportion of their salary bill eligible for the CJRS,' a DfE spokesman said.

Neil Leitch, of the Early Years Alliance, said that 'this isn’t an even trade as support via the Job Retention Scheme only applies to a provider’s wage bill and is capped at 80%.'