Analysis: EYSFF - Striving for fair shares
Melanie Defries
Tuesday, March 9, 2010
How are the second wave of pathfinder local authorities going to slice their single funding formula for childcare providers when they start next month? Melanie Defries asked them.
The implementation of the Early Years Single Funding Formula will take place in three weeks for the 56 local authorities that have been selected by the DCSF as second-wave pathfinders (News, 25 February).
The majority of local authorities have until 2011 to finalise the details of how both the PVI and maintained sectors will be funded for the free entitlement, based on participation rather than places. But the new pathfinders, which make up around one-third of the local authorities in England, will be taking the plunge from 1 April.
Nursery World found confusion among settings in some of the 56 pathfinder areas as to how their funding for the free entitlement is to change next month and what supplements will be available to them. We asked five local authorities to explain their approach to the single funding formula and the likely impact it will have on childcare providers in the area.
Bournemouth Borough Council
- - Base rate: £3.76 per child per hour
- - Supplements:
- Deprivation - £0.38 per eligible child
- Quality - £0.19 per child per hour
Private and voluntary settings in Bournemouth will be at least 30 pence per child per hour better off under the council's base rate for the single funding formula.
Every setting will receive the quality supplement for the first year, but the council may choose to remove it from some settings in future years if there are concerns over the quality of provision.
Kay Errington, strategic lead for early years childcare and play at Bournemouth Borough Council, says that PVI settings in the area have welcomed the local authority's decision to apply for pathfinder status and are satisfied with the base rate and the supplements that have been set.
'Based on the feedback we received from one-to-one meetings with childcare providers and the briefings we have given at events for the PVI sector, the feedback has been mostly positive,' she says. 'The nursery classes will receive less funding but they are protected by the minimum funding guarantee for schools. Overall, the impact on the maintained sector in Bournemouth was not as much of an issue as it has been in other areas, because Bournemouth does not have any stand-alone maintained nursery schools. The biggest challenge for many settings seems to be the shift to thinking in terms of hours rather than sessions. We are not anticipating that any settings will close or be disadvantaged.'
Cheshire East Council
- - Base rate: £3.25
- - Supplements:
- Flexibility - up to 20 pence per child per hour
- Deprivation - £0.005 per child per hour (multiplied by the percentage of children attending from a deprived area)
- Nursery school - lump sum of £47,933
- Rural settings - lump sum of £2,000 per setting classed as rural
- - Quality:
- Outstanding Ofsted grading -£0.05 pence per child per hour
- Practitioner with EYP status - £0.20 pence per child per hour
- Qualified teacher - £0.25 pence per child per hour
- - Transitional funding - In year one, settings who would receive less funding under the formula compared with what they received for 2009/10 will have only 50 per cent of that reduction applied.
Cheshire East has linked its three-tiered quality supplement to both Ofsted inspection outcomes and the qualification levels of nursery staff.
The area's one maintained nursery school, Westminster Nursery School in Crewe, which stood to lose out under the formula, is to be protected by a one-off payment of £47,933. Other settings that stood to receive less funding under the new formula will have only 50 per cent of the reduction to their funding applied in year one.
Eileen Smith, head teacher of Westminster Nursery School, says, 'We are the only remaining maintained nursery school in East Cheshire and the council is supportive of us and doesn't want to do anything detrimental to our provision. We certainly have reservations about the single funding formula, but I feel that until we see how it works we have got to be positive about it. We are in a very deprived area and a third of our pupils have English as a second language. This has not been taken into account with our funding for next year. However, I hope that the council will look at this issue in the future.'
Cheshire East Council found that the biggest challenge in developing the formula was in obtaining financial data from settings.
A spokesperson from Cheshire East council explains, 'There was a general lack of trust from providers about how this information would be used. Eventually, we did manage to get a sufficiently reliable statistical sample and supplemented this with other information, such as Companies House accounts information for daycare settings.'
Nottinghamshire County Council
- - Base rate: £3.765 per child per hour
- - Supplements:
- Deprivation - £0.80 per child per hour (based on eligibility for free school meals) plus extra £1.76 if meal is provided.
Nottinghamshire County Council wanted to create a formula that was as simple as possible and has not included any supplements for flexibility or quality.
John Thorn, head of early years and childcare services of Nottinghamshire Children and Young People's Department, explains, 'I have heard of local authorities with five different funding rates, and low base rates, which to me sounds unnecessarily complicated. The PVI sector is getting a small increase in their hourly rate, and they are able to access a deprivation supplement for children who qualify for free school meals. We do not have any transitional funding, as the maintained sector is covered by the minimum funding guarantee for schools, which will come out of a separate budget. We also decided against including a quality supplement. We couldn't justify funding settings at one rate and then taking funding away if their Ofsted rating is downgraded. It seems counterproductive to take money away from a setting if it is not doing very well.'
Mr Thorn believes the impact of the single funding formula on the maintained sector in Nottinghamshire will be minimal because the area has no stand-alone nursery schools, and nursery classes were already being funded based on participation rather than places. 'The maintained sector has always had to manage its places in an appropriate way,' he adds.
The early years department at Nottinghamshire County Council also found it a struggle to get financial data from early years settings.
Mr Thorn says, 'I would estimate that less than 50 per cent responded to our requests for this information and the information that was provided did not help us to identify any sort of pattern. In the end, we abandoned that approach and worked out the formula based on a 26-place setting and what staff costs were likely to be, plus what rental costs were likely to be in the area. There were no more than ten factors that we had to take into account. I am happy to share what we did with any other local authority.'
London Borough of Islington
- - Base Rate: to be confirmed, but no less than £3.29 per child per hour.
- - Supplements: management, deprivation, small schools - all to be confirmed
- - Transitional funding - All settings will be funded as per their agreed number of pupils for January 2010 in the first year.
In the London Borough of Islington, details of the single funding formula and the supplements that settings will receive are still being finalised. However, Islington was determined to go ahead as a second-wave pilot so that any problems could be identified and addressed before statutory implementation of the formula in April 2011.
Tracy Williams, head of finance for Cambridge Education, the borough's education partner, which manages the schools for the area, explains, 'Implementing the formula a year early gives us the chance to make any necessary changes before the statutory implementation in 2011, which will be for a three-year funding period. We are still finalising the base rate for providers, as we have just received all the data that we need from them.
'The base rate that has been agreed is at least £3.29 and there are additional supplements for management, deprivation and for small schools. The details of these supplements have not been finalised yet, as we need to know how many children we will be providing the free entitlement to.'
Islington does not expect its maintained settings to be negatively impacted by the formula.
Ms Williams says, 'We are not anticipating any major changes to the amount of funding schools will receive, because the majority of our nursery schools and classes will be more than 85 per cent full. We are protecting nursery schools by looking at what they would have received when they were place-funded and guaranteeing them a certain percentage of that. We see the EYSFF as an extension to the funding of the good provision that we currently provide and a chance to review a funding mechanism that has been the same for a long time.'
Southampton City Council
- - Base rate: PVI sector - between £3.29 and £3.65 per child per hour, depending on the flexibility of the setting Maintained sector - £4.16 per child per hour
- - Supplements:
- Quality - Five different supplements ranging from £0.09 per hour for practice led by Level 3 qualified staff, to £0.45 per hour for settings led by qualified teachers or practitioners with EYP status
- Deprivation - each setting will receive a different supplement based on the mean deprivation level at their setting as ranked by the Income Deprivation Affecting Children Index (IDACI).
Southampton was one of the original pilot areas for the single funding formula and has been approved to implement the single funding formula from April.
Tim Davis, service manager for children's data and policy co-ordination at Southampton City Council, says, 'One of the problems we found when we were a pilot was the DCSF's decision that funding would be on participation rather than places, as it came quite late in the day. It meant a big change for our maintained settings. For the academic year 2009/10 we worked around this by funding maintained settings on a place basis but changing the number of places that we funded them for.
'From next year we will be making changes to their funding according to how their pupil numbers change throughout the year. We might take money back or give them more money if the numbers change. If maintained settings have fewer children than they are being funded for, we will adjust their funding to the actual number of children that they had but increase the rate per child by about 5 per cent. This is intended to protect them but not have a situation where we are funding a large number of places that are unfilled. Maintained settings will also get the quality supplement because their staff are highly qualified, plus there will be extra funding for deprivation.'
Southampton City Council regards the original pilot as a success and says that providers seem satisfied with the funding arrangements.
Mr Davis says, 'We spoke to a lot of childcare providers during the pilot and asked them for their views on how we might go forward. In the original consultation we suggested a different rate for private settings, but providers told us that what governed the cost was offering flexible access to early years education and not the status of the setting. As a consequence of this feedback, we changed the base rate model.
'We have not had any problems with providers choosing to walk away from offering the free provision. The maintained sector was less enthusiastic, but I think they are satisfied that we have taken their concerns into account.'