Settings face cuts after council overspend

• Northamptonshire considers cuts to achieve £1.8m in savings
• Providers may be forced to reduce staff and salaries

Childcare providers in Northamptonshire may be forced to get rid of staff, resources or reduce their own salaries if the county council goes ahead with plans to cut early years funding from April.

A fortnight ago, the council revealed proposals to withdraw the quality supplement paid to providers to deliver funded places and make reductions to the deprivation and high needs supplements in order to claw back the £1.8m it has overspent on early years in 2018-2019. Other proposals include reducing maintained nursery schools’ funding and/or central expenditure.

A vote by the Schools Forum on which cost-saving measures to take in the coming financial year was postponed by the council until Friday, 29 March after providers came up with alternative solutions, one of which is to withdraw or reduce the notional SEND supplement. A final decision will be made by the council’s director of children’s services, Walter McCulloch.

According to Sam Evans, owner of Little Learners Childcare and the PVI member of Northamptonshire’s Schools Forum, providers are now looking into what changes they can make to remain sustainable should the council go ahead with plans to reduce funding.

The current base rate providers in Northamptonshire receive is £3.66 an hour for three- and four-year-olds.

Ms Evans said, ‘Several childminders have said they will no longer offer funded places.

‘Some nursery owners are looking at reducing any supernumerary staff, cut back on resources and reinvestment, reduce their own salaries and increase or introduce consumable charges.’

Ms Evans stands to lose £5,000a month as she provides care for a lot of deprived children and children with SEND at her two nurseries.

Childminder Laura Carr plans to stop offering funded places.

The Corby-based childminder explained, ‘I will not be offering funding once my current lot leave in July. I feel we are all massively under-selling ourselves and even if parents top up the shortfall, that doesn’t stop the council continually paying providers late or the wrong amount.’

Jenni Cheney, owner of JJ’s Childcare in Welford, an Ofsted Outstanding setting, said they may be forced to get rid of their supernumerary staff.

The nursery is set to lose around £600-£700 a month if changes are made to funding supplements.

Ms Cheney told Nursery World, ‘We have been looking at ways in which we can save money but still remain a quality provision, and one option would be to reduce our supernumerary staff, two of which are Level 3 qualified. However, we use these staff for cover and admin, so it would mean I would need to come back into ratio at busy times, taking me away from the normal day-to-day running of the setting and forcing me to complete admin during evenings and weekends. I’ve only been full-time out of ratio for three years as before this we couldn’t afford additional staff and agency staff are too costly.’

Mrs Cheney said depending on the council’s decision, they may need to increase fees, put up the ‘extras charge’ and be less flexible with funded places. They are also considering expanding their holiday club to help with finances.

Nursery schools

One council proposal is to reduce the amount maintained nursery schools receive to put it back in line with grant funding.

Northamptonshire County Council has been paying its nine nursery schools more than the funding it receives from the Government.

The council applied the £690,000 it received through the supplementary funding from the Department for Education to both the universal 15 and the 30 hours for eligible children, but the department says the funding is based only on the 15 hours.

For children taking up the additional 15 hours on top of the universal hours, nursery schools should have received the base rate funding plus any additional supplements that they and the children are eligible for.

The council now wants to claw back the overpayment from nursery schools for the current financial year, as well as the previous one, totalling more than £300,000.

The two nursery schools based at Pen Green Centre for Children and Families and Camrose Early Years Centre, which receive a combined total of £1.5m extra under maintained nursery schools funding as they are integrated centres of excellence, will see a greater cut to their funding.

Joint head teacher of Pen Green nursery school Angela Prodger said, ‘The council didn’t start engaging with us about funding until October.

‘They are proposing to claw back £98,000 from us and a similar amount from Camrose.

‘On top of this, if the council goes ahead with plans to withdraw the quality supplement for all settings, we would lose more than £30,000. If it reduces the deprivation supplement, we would lose £7,000 and £6,000 if the SEN supplement is reduced.’

Council overspend

According to the council, additional costs in 2018-19 of approximately £1m, including overspend of its Inclusion Fund and increased early years central costs, are partly to blame.

It also said ‘early years numbers’ have reduced, which have been reflected in lower funding through the Dedicated Schools Grant (DSG), while the introduction of data collection and new payment arrangements from 2017 had resulted in problems with monthly payments to providers.

A spokesman for Northamptonshire County Council said, ‘At Monday’s Schools Forum we had a very productive conversation with early years providers where alternative suggestions were made around how such savings could be made.

‘We are now in the process of looking at these suggestions in addition to reviewing the original proposals and will set up a further meeting in two weeks to discuss further and review the options.

‘There is widespread understanding that savings have to be found, so now it is a case of doing so in a way which has the least possible impact on the sector and of course the county’s children.’

Case study

Little Steps Day Nursery in Higham Ferrers, owned by Heather Woolston and Karen Bounds, is set to lose at least £2,200 a month if the council goes ahead with proposals to remove and reduce supplements.

The 192-place setting, which is rated Outstanding by Ofsted, employs an EYP, a teacher, a Level 5 practitioner and a SENDCo. All staff are trained to a minimum of Level 3.

Ms Woolston told Nursery World, ‘If the council removes the supplements, this will impact us by a minimum of £2,200 per month, which is £26,400 per annum. If this happens, we would seriously have to reconsider how many hours’ funding we would allow parents to access.

‘We have already made the decision not to accept funded-only children from September due to the rate of funding we receive and the fact that our overheads have increased considerably. If the funding rate was reflective of the real costs of caring for children, we would of course reverse this decision.’

The owners, who have written to their MP asking for help, said if overheads continue to ‘spiral’ and funding is not increased, they will seriously have to consider whether their business model is still viable.