Funding formula online calculator launched

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A confusion-busting online calculator is helping settings work out what rates they may be getting when the new early years national funding formula is rolled out.

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Pre-school Learning Alliance has launched a funding formula calculator

Users of the tool, created by Pre-school Learning Alliance, need only choose their local authority area before seeing their projected hourly rate appear.

This includes the average supplements for the area, as estimated by the Department for Education (DfE).

The calculation summary also highlights the expected impact of any graduated changes from 2017/18 until the final implementation in 2019/20.

To calm turbulence for settings, the DfE is not requiring councils to pay the full new rates immediately.

An Alliance spokesperson explained, ‘Crucially, the calculator lets providers know what rate they might receive next year if their local authority doesn't move to a universal base rate straight away (a change that is only required by 2019/20).

‘Whether or not this happens is likely to have a significant impact on the rate that PVI providers receive in 2017/18.’

For example, in the London Borough of Lambeth, which is predicted to receive less money from central government under the new formula, the rates across all kinds of settings, are projected to be £7.14.

However the Alliance suggests PVI providers in the borough would get an average of £5.19 per hour from 2017/18, gradually rising each year to the new level.

The calculator is supported by the Alliance's new funding proposal guide, a concise summary of the early years funding proposals, to support providers to understand the Government's plans ahead of the consultation closing date on 22 September, and beyond.

The guide is also available at and can be downloaded as a free PDF by both Alliance members and non-members.

Information on how to order a free hard copy will be available on the Alliance website next week.

Chief executive Neil Leitch said, ‘There's no doubt that the current early years funding proposals mark some of the most significant changes to the early years in recent times.

‘And yet, we know that many practitioners are unclear about what exactly is being proposed, and in particular, what impact this will have on the funding rate they will receive next year. 

‘These resources aim to support providers in two ways: helping them to respond to the Government consultation by providing a simple overview of the planned changes, and also, crucially, to helping them to understand what the changes might mean for them next year.

‘While the Government has provided illustrative figures on 2017/18 provider funding rates, these figures are based on a number of assumptions that we do not necessarily agree with - most significantly, the assumption that local authorities will move to a universal base rate in April, even though they're not required to until 2019/20.

‘This could make a huge difference to the amount of funding that PVI providers receive next year, and so we've ensured that our calculator makes clear the different approaches local authorities might take and how this could affect providers.'

‘Ultimately, our aim is ensure that providers are well-informed, and prepared for the significant changes to come.’

Shannon Hawthorne, press and public affairs director at the Alliance, said, ‘The various aspects of the proposed changes - area cost adjustments, additional needs factors, universal base rates for both local councils and, separately, providers - have resulted in a lot of confusion.

‘The idea of the calculator is to make the proposals, and their likely impact, as clear as possible.

‘We've taken data from each individual local authority's most recent section 251 returns and combined that with the latest DfE benchmarking data to create a quick and easy way for practitioners to access information about their specific local authority.

‘This, alongside the funding guide, is an invaluable resource for any practitioner seeking clarity on the government's plans.’

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