Sector response: early years national funding formula

Purnima Tanuku, chief executive of the National Day Nurseries Association, said, ‘We welcome the Secretary of State’s commitment to the reforms and assurance that most areas will see a real increase in funding. This consultation shows the Government has listened to our concerns. We are pleased that a number of our recommendations to simplify the funding formula and ensure that as much money reaches the front line as possible have been included.’

Commenting on the detail, she added, ‘We’re also keen for plans for an equal base rate for all provider types – schools, nurseries and childminders - to come to fruition as quickly as possible. Plans for a streamlined approach to supplements focusing on factors such as deprivation, rural areas and flexibility also seem fair, but the option for a higher rate for settings offering 30 hours free childcare could be seen as an incentive or a penalty. We will look in detail at whether this will penalise smaller or sessional settings where they don’t have the resources to deliver more than 15 funded hours.’

The NDNA also said that ‘overall meaningful investment’ was necessary to deliver the 30 hours given the National Living Wage Increases over the next few years.

PACEY said that the plans were a solid basis for moving forward.

Chief executive Liz Bayram said, ‘We'll need to better understand how the five proposed areas for funding supplements could work but a focus on supporting settings with higher staff costs such as those in London,  rural childcare and flexible, out-of-hours childcare is positive. If they work well, these supplements and the other proposals could encourage more providers, in particular registered childminders, to offer free places.

‘Ultimately, all this only works if the funding allocation local authorities receive is enough to meet the vary needs of local families. This remains the key ensuring this extension of free early education delivers the extra support so many families desperately need.’

The Pre-school Learning Alliance said the consultation included a number of very encouraging proposals and that moving to a universal base rate was a significant and positive step.

Chief executive Neil Leitch added, ‘That said, distribution of funding is only part of the funding story. Clearly, if the central pot of early years funding is insufficient, then no matter how well it’s distributed, those on the frontline will lose out. Given that the Government still has no idea what the hourly cost of delivering childcare is, there is a danger that today’s proposals will mean that many providers will receive more funding, but still not enough.

‘What’s more, given that many of the changes announced today are going to be introduced over a prolonged period - with the universal base rate not made compulsory until 2019-20 - it’s vital that Government takes steps to ensure that providers are adequately supported in the interim period, especially in light of the impending rollout of the 30-hour free entitlement offer.’

Nursery schools

However, Unison voiced concern about the future of maintained nursery schools, which stand to lose out with significant cuts to their funding.

Ben Thomas, Unison national officer, said, ‘Mid-August is a ridiculous time in which to release the consultation, given that it has been promised since March.

‘The proposals could threaten the very future of maintained nurseries if there is to be universal funding rates for all types of provider.

‘They often lead and support other settings in their area in improving the quality of provision. The consultation says that they should look at efficiencies to reduce costs. Given that around 80 per cent of expenditure is on staff, this is likely to mean either closures, a reduction in the number of qualified teachers in nursery schools, or cuts to staff pay and conditions.

‘The promise of two years' funding protection will be of little consolation. Nursery schools are one of the great successes of state education. This consultation will recklessly put their future at risk.’

He said that schools had been promised that they would lose no more than 1.5 per cent of funding in a year in schools funding reform and that it was unreasonable to expect the maintained early years sector to cope with 5 per cent cuts.

Commenting on the proposed limits to local authority central spend, he said, ‘Early years support by local authorities has already been decimated in many areas as a result of successive central Government cuts, these proposals could see these services disappear entirely.'

Voice said that there was a risk that shortfalls in funding would lead to a deterioration in the quality of childcare as providers find it difficult to pay competitive salaries for qualified staff and make arrangements for ongoing training and development.
 
'Sufficiency of funding is paramount, so careful monitoring needs to be put in place to ensure that changes in funding are in step with what the sector needs to ensure survival and sustainability. The financial cushion of a maximum of 5 per cent annual reduction in funding is much less favourable than that being promised to the school sector and is likely to see some nurseries struggle to survive as austerity continues to bite, in spite of rises in the minimum wage and the national living wage, utility bills and employer's contributions to workers’ pension and national insurance payments,' a spokesperson said.
 

'Equal access'

Sector organisations and those that work with disabled children welcomed the acknowledgement that it costs more to support them and their families.

Dame Christine Lenehan, director of the Council for disabled children, said, ‘Families with disabled children too often experience financial barriers to getting the childcare they need. It is therefore absolutely right that the Government has made improving access to childcare for the families of disabled children a priority in their consultation on Early Years National Funding Formula. We welcome the intention to give equal access to childcare to all families and will be scrutinising the proposals to make sure that’s what they do.’

Amanda Batten, CEO of Contact a Family, said, ‘Contact a Family is delighted that the Government has recognised that childcare providers need extra funding to make sure disabled children have access to safe, high-quality and flexible childcare and factored this into their early years funding formula proposal.

‘As well as making sure childcare providers automatically get additional funding for every child they look after who has Disability Living Allowance, we also welcome the Government’s plan to set up SEN inclusion funds that will provide additional funding for providers. These measures should make it easier for childcare providers to access the extra money they need to improve outcomes for disabled children.’

• The consultation runs from 11 August – 22 September. The Government’s response to the consultation will be published in the Autumn.