Northamptonshire County council says due to reduced grant funding from the Government, the money it spends on early years is heading for a £1.8 million overspend in the next financial year, 2019-2020, if changes are not made.
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The council, which is spending more than what it receives through the early years block of the Dedicated Schools Grant (DSG) funding from the Government, is proposing a number of cost-saving measures including:
- Current base rate is £3.66. No plans to revise this for 2019/20 (assuming that all other proposed changes are progressed).
- Withdrawing the 53p (per hour/per child) supplement paid to providers for children with SEND and high needs.
- Reducing the deprivation supplement from 32p to 25p per hour, per child, which would achive a saving of £0.1m.
- Dropping nursery schools’ funding to put rates back in line with grant funding. There are nine nursery schools in the county.
- Reducing the quality supplement to generate £1m in savings.
- Reducing central expenditure by £0.4m.
A vote on which measure/s to implement will be take place this afternoon at the council’s Schools Forum. A final decision will be made by the council’s director of children’s services, Walter McCulloch.
On the quality supplement, the council, which was declared bankrupt last year, says that only a third of local authorities provide the ‘discretionary payment’ and Northamptonshire has the third highest rate across the country.
According to the council, additional costs/pressures in 2018-19 of approximately £1m, including overspend on its Inclusion Fund and increased early years central costs, are partly to blame for its overspend. It also says that ‘early years numbers’ have reduced, which have been reflected in reduced funding through the Dedicated Schools Grant (DSG), and the introduction of an early years data collection and payments arrangements from 2017 that resulted in problems regarding monthly payments paid to providers.
Last month, Nursery World reported that more than 80 per cent of childcare providers, including nurseries and childminders, had been either overpaid or underpaid for funded places due to the introduction of a new IT system by the council.
Northamptonshire County Council claims that without implementing cost saving measures it would need to make cuts to schools, high needs budgets or the base rate paid to childcare providers for the 15 and 30 hours.
Impact on providers
Sam Evans, who operates Little Learners Childcare, two nurseries in Northampton, said she could lose £5,000 a month with the council’s measures as she cares for a lot of deprived children and children with SEND.
She told Nursery World, ‘The overspends are mostly the council’s in their central costs, yet we are the ones paying for it. I will suffer badly from this because I have lots of SEND and deprived children, but I also receive the highest quality supplement. How can they [the council] justify this?’
Tom Shea, owner of nursery group Child First, said if the proposed cuts to the SEN supplement are given the go ahead, they would really have to scrutinise which children with special needs they can provide care for. He also said they would have to increase the ‘additional’ cost to parents generally.
A spokesman for Northamptonshire County Council (NCC) said, ‘Due to reduced grant funding from central government, spending on early years in Northamptonshire will be heading for a £1.8m overspend in the next financial year if changes are not made.
‘At a recent consultation with early years providers that took place in December around reviewing these payments, clear feedback was given by nurseries and other settings that there should be no reduction to their hourly base rate. As such, proposals are being put forward that would protect these payments but explore other ways to reduce the overspend.
‘The main proposal is to reduce the quality supplement. The proposal is to reduce this level in a way which has the least impact and discussions will take place how to achieve this.
‘Further proposals include reducing payments to maintained nursery schools to put them back in line with their grant funding and reducing the central expenditure to cover NCC costs, including support to the sector.
‘The council understands these are very difficult decisions and wants to work alongside providers of Early Years settings to minimise the potential impact. We hope we can continue with our challenging yet civil dialogue with the majority of settings to find the best solutions to these challenges.’