DfE brings in temporary change to early years funding to provide 'reassurance' to nurseries and childminders

The move will be a relief for many nurseries, pre-schools and childminders whose occupancy in January - when funding is usually calculated for the financial year - was much lower than in previous years due to the high numbers of Covid cases and the start of the current lockdown.

Many providers were left struggling to deal with a rise in Covid cases and staff absences, with some forced to close without extra financial support.

Ofsted figures show that the number of reported incidents of Covid-19 doubled in one week in January.

The annual headcount (early years census), which is carried out every January, informs early entitlement funding levels in different areas in England, and this year took place during the week beginning 18 January.

However, in a last-minute change the week before this year's census, the DfE said that children not currently attending an early years setting due to coronavirus, but that were registered with one, should be included in this year's census.

The change by the Department for Education in how funding should be calculated for the summer and autumn terms in 2021 will be seen as an acknowledgement that using the January census day this year was inappropriate given the impact of coronavirus on children's attendance in early years settings.

A DfE spokesperson told Nursery World that the temporary change in how funding is calculated is designed to give reassurance to early years settings whose numbers in January were fluctuating because of the pandemic, and confidence that they will receive funding levels based on the number of children coming into settings.

Early years settings should also receive extra funding from their local authorities to compensate them if their numbers have risen during the spring term since the census was taken in January.

The DfE has updated its guidance on free early education entitlements funding during coronavirus (COVID-19), which explains how the Government is funding local authorities in the spring term, and summer and autumn terms in 2021.

It states that:

• The DfE is temporarily adapting how it funds local authorities and providers over the next financial year by using their termly attendance count in the summer and autumn terms, to protect their funding income and provide extra reassurance.
• It is also providing top-up funding for councils who saw a rising demand of free childcare entitlements over the spring term, capped at 85per cent of their census level in January 2020. 

Children and families minister Vicky Ford said, ‘The majority of parents who used formal childcare before the pandemic are accessing it as we make the transition out of lockdown, which is testament to the hard work that early years staff are putting in to support and reassure families, while delivering crucial care and education to our youngest children.

‘We are providing top-up funding for councils who saw a rising demand of free childcare entitlements over the spring term, capped at 85 per cent of their census level in January 2020.

'We will also temporarily adapt how we fund local authorities and providers over the next financial year by using their termly attendance count in the summer and autumn terms, to protect their funding income and provide extra reassurance. 

‘As part of our new £700 million package to provide extra support to children who need it as they return to the classroom, we have invested £18 million to support language development in the early years.’

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said, ‘It was astonishing that the Department for Education changed the levels of support for early years when the latest Covid spike was at its highest. This left providers to deal with increased cases, staff absences and having to partially or fully close settings with no additional support.

‘Any steps to recognise that the January census, taken when cases were peaking, is a flawed measure for funding early years provision is of course to be welcomed. Many local authorities are already keeping up to date records of attendance, especially where they fund providers on a monthly basis.

‘More can be done to simplify the funding system to minimise the administrative burdens on local authorities, settings and families. We want to see a single childcare account where parents are in control of the support they receive for their children and can direct this to their provider of choice. This would ensure funding for a child follows that child.’

• Use of free early education entitlements funding during coronavirus (COVID-19)