Pilot areas win extra funding for 30 hours

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Local authorities taking part in the 30-hour childcare pilots from September have secured an increase in funding from the Department for Education, after providers in York won their battle for more funding to trial the scheme in their area.

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The early implementer pilots signal the start of the countdown to free 30-hour childcare for working parents

Most of the other early implementer areas will also receive an uplift in rates.

Nurseries and childminders in York had threatened to boycott the scheme because the funding was too low and unsustainable. The York pilot is unique because it is the only one of the eight early implementer areas operating on a local authority-wide scale by all types of providers.

The immediate crisis was resolved following talks between the council and DfE officials. Childcare providers in York will now be paid a flat rate of £4 for all eligible three- and four-year-olds.

Local authorities in the early implementer areas will be expected to offer a single rate for children taking up a 30-hour place. Some other areas had also previously announced split funding rates, which sector organisations and providers said would be unworkable.

The DfE said it had received new baseline data on what LAs allocate to early years, and that it had increased York’s funding rate to reflect this. The early implementer rate will be funded across the full 30 hours.

In Swindon, providers offering the 30 hours will receive £4.41 an hour. A council spokesman said, ‘Swindon Borough Council welcomes the DfE’s announcement that it will fund early implementer areas for the full 30 hours. We thank local providers who will be delivering the pilot for submitting information that has helped with the overall process.

‘The council has agreed an increased hourly rate with the DfE and continues to hold discussions with the department about funding elements of the pilot.’

Hertfordshire County Council confirmed it has also received a small uplift in funding for the 415 places linked to the 30-hour pilot and has opted to continue with its original plan of splitting the funding. The council will offer £4.62 for the first 15 hours and £4.88 for the second.

Instead of redistributing the ‘less than £10,000’ extra funding, the council will use the money to offer bespoke business support to providers taking part in the pilot to help ensure their sustainability.

A council spokesman said, ‘As the funding rate for free early education providers across Hertfordshire is agreed in February each year, the decision has been taken not to change the funding rate for this very small cohort of children.’

The council pointed out that DfE guidance states that local authorities have discretion in how they distribute the funding available for early implementation.

Northumberland has also received an increase to the funding rate, which has risen from £4.01 to £4.33 for the extra hours, plus extra funding for deprivation.

As much of the provision in Northumberland is in rural areas, some parents use two providers, and in this case a ‘blended hourly base rate’ of £3.74 will be split across both providers, plus deprivation funding if applicable.

In the London Borough of Newham the rate remains unchanged, but is the highest base rate of the eight authorities at £5.17 an hour. It will offer 415 places to children with special educational needs and disabilities.

However, three of the eight early implementer areas are yet to confirm funding rates.

Mark Sutton, Staffordshire County Council’s cabinet member for children and young people, said the council had been working closely with the DfE since the trial was announced to ensure that providers receive a suitable rate for the extra hours.

‘The extension to 30 hours is great news for Staffordshire parents and we were delighted to be chosen as a trial area from September 2016.

‘The trial scheme has limited places and we do hope the programme is rolled out to all eligible parents in 2017. The extra hours will help give children the best possible start in life and will make a real difference to working families in Staffordshire.

‘The trial will also see us working with a number of local employers, which will help us understand how extra funded hours of childcare can be used as work incentives and to help us further develop flexible packages of care for families.’

Portsmouth and Wigan are also in the process of finalising the funding rates for providers, and are expected to confirm the rates imminently.

For full roll-out in September 2017, the DfE said it would be giving local authorities the same rate for the 30-hour offer as the 15-hour offer.

The DfE said more details would follow soon in the Early Years National Funding Formula consultation.

A DfE spokesperson said, ‘York has been historically underfunded and in recognition of this we have given the local authority an additional uplift on their rate for those providers that deliver 30 hours as part of early implementation. As part of our preparations with our early implementer areas, we received new baseline data on what LAs allocate to early years, and in light of this new information we had very constructive conversations with local authorities and the NDNA. These are the things we will look at as part of funding reform for 30 hours.’

CONSULTATION RESPONSE FROM NDNA, PRE-SCHOOL LEARNING ALLIANCE AND PACEY

Not surprisingly, early years organisations responding to the Government’s consultation on the 30 hours, which has just closed, have all highlighted the need for sustainable funding rates.

As the National Day Nurseries Association points out, the move to 30 hours largely removes the opportunity for providers to make up the funding shortfall by cross-subsidy. Its CEO Purnima Tanuku said, ‘With the increase from 15 to 30 hours, providers will no longer be able to recover the shortfalls in funding by increasing parental fees for additional hours or for younger children’s places. As seen by the initial response of nurseries in some of the early implementer areas, providers find themselves unable to participate if funding levels remain unsustainable.’

The NDNA also said a monthly payment system would improve cash flow for many providers where advanced funding is not available, and that a model funding agreement with local authorities was welcome to ease the administrative burden on providers. Its response also said that the rules on delivery of 30 hours must give nurseries confidence they will have control of their operating model, including charges for extras and control of the timing and requirements on access to free versus paid-for sessions.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘We welcome the move by Government to address some of the practical challenges currently facing providers delivering the free entitlement, such as ensuring more timely payments from councils and the development of a model agreement to encourage greater consistency across different local authority areas. That said, there is only so much progress that can be made when the question of funding remains unanswered.

‘Many of the issues raised in this consultation – such as the need for greater flexibility, and the provision of SEND support – can only be addressed with adequate funding.’

PACEY used the consultation to highlight the particular barriers facing childminders, noting that while take-up of three- and four-year-old places is high among nurseries and pre-schools, just 1 per cent of three- and four-year-olds use a free place with a childminder. This is despite the fact that childminders offer a fifth of all early years places in England.

One ‘major barrier’ highlighted is the ban on allowing childminders to look after related children.

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years, said, ‘Childminders are put off delivery of the free entitlement because of poor fee levels and inadequate administration like all providers, but also because their fees are often different from other settings; are reduced when their funded two-year-old children turn three (unlike a nursery, childminder ratios do not change for children under five); and because childminders still cannot claim the free entitlement for any related children they care for.

‘PACEY is concerned that the early implementation phase has placed too much reliance on the handful of childminder agencies that exist, despite continued childminder concerns around the agency approach.

‘More focus needs to be given to the removal of these key barriers to childminders’ participation.’

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