Nursery Management: Capital Funding for two-year-olds - Logistical challenge

Mary Evans finds out what level of support nurseries are receiving to help them to meet the target for twos in September.

With just six months until the launch of free early years education for the 20 per cent most deprived two-year-olds in England, there is uncertainty among providers about the level of help and financial support available to them.

This September, the Government is extending the current crop of pilot schemes offering nursery places to two-year-olds to cover all local authorities, involving around 130,000 children from low-income families.

By September 2014, the scheme will expand to provide 15 hours free early years education for two in five of the country's two-year-olds.

The Government has allocated local authorities a total of £100m in capital funding to spend on the provision and creation of places.

While the current economic climate has meant that many providers have spare capacity, they are often not located in the neighbourhoods where the places are needed, or their settings need to be adapted to create space and facilities to care for two-year-olds.

Some councils such as Derbyshire, which took part in earlier pilots, made the decision to continue funding the places locally until the national programme comes into force and so has been working for a while on identifying places.

In other areas, there is a gap between the expected numbers of eligible children and places. It is estimated that 100,000 new places are required across the country. A survey last year by the Daycare Trust found a shortfall of 25,000 nursery and childminder places for two-year-olds in London alone.

Under the capital funding programme, existing settings will be able to access money to expand their premises to increase capacity for two-year-old places. The money is also available to support newcomers to the sector - such as daycare providers and childminders - to set up their businesses so that they can offer free places to twos.

Discussions are under way in local authorities nationwide 'for managing and distributing funding from April 2013', according to James Hempsall, director of Hempsalls, with which Mott MacDonald has the DfE's national support contract, 'Achieving Two Year Olds' (A2YO).

This timetable is posing logistical problems. As one provider says, 'I need to know what is available before I can decide whether to expand the building and there is not that much time now with all that entails, such as getting planning permission.'

However, until the details of what is available are made public in each authority area, providers that are keen to support the scheme in principle are voicing concerns about how it will work in practice.


Claire Schofield, director of Membership, Policy and Communications at the National Day Nurseries Association (NDNA) says, 'The picture on how capital funding for two-year-olds is being rolled out is not yet clear.

'The Department for Education has shown its commitment to greater transparency on funding by publishing the amounts allocated for delivery of places and capital funding. NDNA is actively sharing this information with members to encourage them to discuss it with their local authorities.

'We need a national assessment of how this £100m announced by the Deputy Prime Minister is being spent, to ensure it is being used to develop the high-quality places that we know will bring the most benefit to disadvantaged twos.'

Ms Schofield reports that there is capacity in private and voluntary nurseries and that NDNA members are interested in offering places for two-year-olds, if the conditions are right. 'Capital funding to develop places is a key part of the picture to unlock this capacity and ensure places are available to the 260,000 children who will soon be entitled to them,' she says.

Ginny Taylor, director of the Merseyside-based Wind in the Willows Childcare chain, says, 'We have not had any information regarding capital funding. One of the settings has just had some information through about a meeting on the business support that will be available.'

At the London-based Happy Child chain of nurseries, managing director Tracey Storey says, 'We deal with seven boroughs and it has been mixed in terms of the information issued to our settings by the local authorities. No capital funding has been offered to date. I have asked how we access this, but it is all strangely silent at the moment.

'Each setting has received a visit or information from the early years department of the local authorities we liaise with, but timing has been very sporadic. In some settings, we were in discussions with local authorities months ago and with others only more recently.'

Ms Storey reports there has been some training for staff and the early years teams have been into the settings to explain the process. 'This is particularly with regards to the home visits element but we do not have to feed back to the local authority, nor do they ask for updates,' she says.

There also appears to be no liaison with other professionals managed by the early years departments, such as speech and language. 'However, it is obviously early days,' she says.

As yet, Ms Storey does not know what capital funding is available and says it is not clear whether the authorities are sitting on the money or whether they are in the dark too. 'I am trying to find out how they are going to allocate funding and whether it will be for resources and possibly extra help for an SEN child, which would be great,' she says. 'Alternatively, it could involve large sums of money because they want you to extend your building.'

Ms Storey is aware that in Ealing providers are being asked to take on empty council buildings, rent them, renovate them and run them for purely two-year-old programmes.

'I would have reservations about this,' she says. 'I would not want to see a nursery that was just for two-year-olds. I think it is good for children to be integrated with other age groups.

'Creating a setting with just disadvantaged twos and their families would put a lot of pressure on the staff. I think if you had to start a setting from scratch you would need a great deal of support.'

Not all Happy Child nurseries will be taking part because some are full with fee-paying parents. 'But some are on the borders of areas of deprivation and we have the capacity and can perhaps help,' says Ms Storey.

'I do like to be involved in these things because they are all for the good of the children but this seems to be a bit of a scatter gun approach.'


At the Old Station Nursery chain, which operates across Gloucestershire, Nottinghamshire, Lincolnshire and Oxfordshire, managing director Sarah Steel says she 'hasn't had a whisper of capital funding'.

'I sit on the schools forum for Oxfordshire, so I am aware of the discussions that are going on. However the figure is only about £700,000, and it is not going to go very far,' she says. She adds that the location of settings will be a significant factor in the take-up of places and therefore the allocation of capital funding. The largest cohort of eligible two-year-olds lives just outside Oxford city centre where there are few settings or even places available.

'We are hearing people say there are lots of places for two-year-olds in Oxfordshire but they are not in the disadvantaged areas,' she says. 'These families will not want to travel to access a place - they will want to take their child to a nursery in a nearby street. If the nursery is the wrong side of the Oxford ring road they won't go.'

City of York Council has carried out research to identify the numbers of two-year-olds who will be eligible ward by ward so that funding can be targeted. Ken McArthur, joint owner of Polly Anna's Nursery in York, who sits on the local two-year-old steering group says, 'In our ward there are only five so we would not be applying for capital funding. In the course of a refurbishment we have already reconfigured the setting so have increased the space for twos in readiness.

'What we don't need is more shiny new buildings for politicians to come along and cut the ribbon. We do need a little bit of imagination, so we are putting the work in now ready for September.

'There is surplus capacity in the system in the number of places for three-year-olds so we need to look at how to use this money to encourage settings to reduce their spare threes places to increase their twos places.'

He adds, 'We work collaboratively in York. The authority is coming up with its thoughts on how the money should be spent and will consult with the steering group.'


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