DfE launches 30 hours fund for councils as new rates unveiled

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Most local authorities will not see any increase to their early years funding rates next year, Department for Education figures reveal, while the Government has launched a new £8m fund to help councils with ‘the challenges’ of 30 hours childcare.

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Most councils will not receive any extra early years funding next year

The money is being made available to support delivery of places for the 2018 summer term, as more children become eligible.

Local authorities can bid for a share of the £8.65m 30 hours delivery support fund. While there is no minimum or upper limit for grants, the DfE said it did not expect to award an LA more than £70,000 in total.

The Government said it was aware of the pressure that the first year of rollout of the 30 hours will put on some local authorities and providers and recognised that demand will rise throughout the academic year as more children turn three, and parental awareness of the 30 hours increases.

Funding will be available for a range of projects, including small-scale capital funding for building, or refurbishment to create more 30 hours places - for example dismantling walls or adding extra toilets.

Other suggestions from the DfE for councils to use the funding are to provide better business support for providers, support for children with special educational needs and disabilities to take up the 30 hours, or enhanced IT systems for automated payments for providers.

The closing date for local authorities to bid is 15 December.

Early years funding rates standstill

An analysis of the 2018-19 Early Years National Funding Formula rates for three- and four-year-olds by the Pre-school learning Alliance shows that the majority of local authorities – 105 (70 per cent) -  will receive no change to the funding they receive from central government.

Just 24 - 16 per cent - local authorities will see a rise to their allocations, while 21 - 14 per cent – will receive less funding.

Richmond-upon-Thames will see its hourly rate rise from £4.90 in 17/18 to £5.61 in 2018/19 – an increase of £0.71 per hour.

At the other end of the scale, the London Borough of Camden will lose £0.45 per hour, with funding dropping from £8.98 in 2017/18 to £8.53 in 2018/19.

The DfE said that when the EYNFF was introduced in April, 80 per cent of LAs saw increases to their funding rates for the three-and four-year-old entitlement, and any changes to 2018-19 rates are solely a result of protections put in place to help local authorities transition to their new EYNFF rates.

Neil Leitch, chief executive of the Pre-school Learning Alliance, said, ‘The publication of the new early years funding rates for 2018/19 show exactly why so many childcare providers are so worried about their long-term viability. Despite the fact that we are seeing staff wages, rents and mortgages, insurance costs and business rates all increase, the vast majority of local authorities in England won't receive a penny more in government funding for the so-called free entitlement next year. Worse still, 14 per cent of councils will actually see a fall in funding. How can this possibly be sustainable?’

Commenting on the 30 hours delivery support fund he said, ‘While we always welcome additional funding to support the sector, it speaks volumes that the Department for Education doesn’t feel confident that current funding levels alone will be enough to ensure that there will be sufficient 30-hour places during the summer term.

‘We have repeatedly warned that that the pressure on 30-hour places will only get worse as the year progresses, and it’s clear from the establishment of this new delivery fund that the Government shares our concerns. But rather than councils being forced to spend time and resources on making applications for one-off pots of funding, surely a better solution would be for the government to simply to fund the 30-hour offer adequately.

‘With funding levels set to be frozen until at least 2020, the fact that the DfE is already having to provide additional ad-hoc support to keep the scheme on track should be a real cause for concern. We urge the Government to look again at the funding for this policy, and invest what’s needed to ensure that it will be viable in the long term.’

 Purnima Tanuku, chief executive of the National Day Nurseries Association, said, ‘We have asked the Department for Education for more information about this scheme, which so far has not been publicised.

‘However, an £8.6 million pot of money across the sector is a drop in the ocean and won’t make a meaningful difference to solving the fundamental issue of underfunding.

‘Only local authorities can bid for this money by 15 December rather than providers, which is a tight deadline and could result in less of this funding reaching the front line.

‘These projects capped at £10,000 could support a small amount of providers in the short term but instead of a sticking plaster, the whole 30 hours policy needs to be scrutinised properly and backed up with a sensible level of investment.’

Commenting on the funding rates for 2018/19 Ms Tanuku said, ‘With inflation running at 3 per cent and other business costs rising, this is in effect a funding cut. This is a real threat to sustainability and shows the government has not listened to the sector.

‘These figures show an unsatisfactory level of investment in children’s futures and family policy.

‘Although in some cases the funding rate has increased slightly, funding rates for next year will not increase for the majority of providers. Worryingly a handful will see their rates reduced, including some of the most deprived areas of England.

‘Most of these rates are just not sufficient for a nursery to be able to deliver quality early years education and childcare. Many local authorities are already passing through the required 95 per cent, so most nurseries will not see any increase at all in their funding.

‘With margins already squeezed and other business costs set to rise in April, it would not surprise us if more nurseries opted out of this scheme due to worries over sustainability.’

Children and families minister Robert Goodwill said, ‘We are determined to ensure children get the best start in life. That is why we are investing a record amount in childcare, including an additional £1 billion a year on free childcare offers for children aged between two and four as well as extra support for disadvantaged families through the Early Years Pupil Premium. 

‘We have established the Delivery Support Fund which will further support local authorities, enabling them to support their providers and ensuring they are able to effectively plan ahead to address any local challenges that may arise.

‘The first term of delivery of 30 hours has been a huge success - over 216,000 codes were generated and 93 per cent of these have been checked by a provider on behalf of a parent seeking a 30 hours place.’

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