Next Tuesday (8 December) Birmingham City Council is expected to approve an ‘emergency increase’ to the funding paid to voluntary and independent (PVI) providers to making delivering the places more sustainable.
It will mean the three- and four-year-old rate will rise by 27p from £3.59 to £3.86 an hour, and the two-year-old rate from £4.86 to £5.24– an increase of 35p. The rates are in-line with the actual cost of delivering the places as highlighted in an independent review by KPMG on behalf of Birmingham City Council, published in June.
Within its report to cabinet, Birmingham City Council stresses that if the funding rate is not increased there is a ‘very real risk’ that a ‘significant’ number of the 550 early years providers in the city will withdraw their provision due to non-financial sustainability. It says that if that happens then the council will be unable to meet its statutory duty to provide sufficient childcare places.
If approved, the move will be a small victory for the Birmingham PVI Support Association, who, since last year, has been campaigning for an increase in funding to cover costs and match the rate paid to maintained settings and schools.
However, the proposed rate increase, which would be funded by the Dedicated Schools Grant (DSG), does not reflect the extra costs of paying staff the living wage, a requirement the council is considering introducing next year for providers delivering the funded places.
Last year, the council issued an ultimatum that to receive the funding for the free places, PVI settings would have to follow the Birmingham Business Charter for Social Responsibility, which stipulates that employees must be paid the living wage (£7.56 per hour).
It is understood that the proposed increase is an interim measure ahead of a council review of the early years funding formula for early education in April. Birmingham City Council has also just launched a consultation into its ‘new-look early years health and well-being services’.
Councillor Brigid Jones, cabinet member for children’s services, said, ‘We need to ensure that our youngest children have the best possible care at such an important stage in their development.
‘For many settings it costs more to deliver the free hours than they get in funding. So if we don’t provide this vital extra support there is a real danger that many of these places could go out of business, and children would lose out. So it is absolutely right that we take this step to support these places that provide such an important service.
Sarah Presswood, chair of the Birmingham PVI Support Association and owner of George Perkins Day Nursery, said that the emergency funding would not have been possible without the hard work and lobbying of the association.
‘Birmingham PVI Support Association is pleased that after a long campaign and the publication of an independent report into the funding levels, Birmingham City Council has recognised the underfunding of the sector and is seeking to redress this with an emergency increase,' she said.
'We look forward to working with the local authority on a full review of the funding rates paid to all nursery providers to ensure fair and sustainable levels of funding from next April.’
The National Day Nurseries Association (NDNA) called the proposed move a ‘step in the right direction’.
Its chief executive Purnima Tanuku said, ‘We welcome this increase as a small step in the right direction and an acknowledgement of what NDNA has been campaigning for now for many years. NDNA informed the KPMG review and has also met with key personnel within Birmingham City Council to support an increase in funding payments.
‘A mid-year emergency increase is a very unusual step and reflects the critical importance of enabling PVI providers to sustainably deliver free places.
‘However, the urgent need for funding reform is ever greater, with the introduction of the National Living Wage in April and the doubling of funded places the following year to 30 hours. This is the first step in the right direction, but not the end of the story.’