EARLY YEARS SINGLE FUNDING FORMULA
Delays and teething problems but full implementation by April 2011
Current primary legislation requires local authorities to secure fifteen hours of nursery education free of charge for all eligible children in their area. And local authorities are expected to work with providers both in the maintained and private sector to ensure that there are no conditions of access to these places. Fundamentally, the Governments position on the EYSFF is that it is for local agreement between local authorities and childcare providers, guided by particular local priorities and circumstances with no interference from Whitehall. (The early years foundation stage came into force in September 2008.) Local authorities are expected to make every effort to ensure that the EYSFF is designed and implemented in a way that enables providers to continue to offer free nursery places.
Ministers in the last Government introduced the formula in a bid to distribute money more fairly to both state and privately run nurseries to pay for these free childcare places. Every child aged three and four was entitled to 12.5 hours of free childcare each week, and this then rose to 15 hours from September. Funding for all sectors offering free nursery places is provided through the ring-fenced Dedicated Schools Grant (DSG), which supports the majority of education provision for children aged 3-16. However, there is no specific ring-fence for early years provision within the DSG and the level of funding made available for education at all ages is defined locally in consultation with a local authority’s Schools Forum. The Government though, has also pledged to ensure that funding is focused on supporting those children from disadvantaged families who benefit most from nursery education. As for the Sure Start programme, in cash terms, this has been largely protected from swingeing cuts in the CSR, although in real terms this is a 3% cut amid promises that that the programme will be better targeted at those most in need.
The EYSFF requires all local authorities to be transparent about the funding that they are providing for free nursery education for three- and four-year-olds—so that parents and providers are able to hold their local authority to account. However the costs of providing the free entitlement are, according to some providers, far exceeding the income received for it. The formula has caused concern among council-run nurseries too, as many are facing budgetary cuts, despite claims that they provided for the most deprived children and offered a number of targeted services. Private providers were worried that they appeared to be gaining little from the formula. Authorities had been accused of basing their new funding plans on insufficient data which to a considerable extent was true. The Government has suggested that if providers are struggling with costs they should be re-examining their costs and delivery model or they should be making a forceful case to local authorities for those extra costs to be recognised through supplements. Given the difficulties faced by local authorities and early years providers in achieving such a major reform, the Government decided not to press ahead with initial plans to introduce the Early Years Single Funding Formula by all local authorities in April 2010. A government survey had showed that less than a third of authorities were ready to deliver from April 2010. So ministers were forced to backtrack on the plans and delay the formula until April 2011. On 26 July, Ministers formally announced that from April 2011 all local authorities will be required to implement the EYSFF.
The aim of the delay was to provide all authorities with some time to finalise their formula before the regulatory framework is introduced. Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), condemned the delay. She said: “Delaying the move is simply delaying fairer and more equitable funding. Providers have had mixed experiences with the formula, but NDNA questions why a few months before it is due to go live that a high proportion of local authorities are saying the formula is not ready. Only recently government reported that experiences from pilot areas showed that delivering the formula is possible, and we question why it cannot be made to work elsewhere.” Some nursery schools and settings are reporting that the single funding formula , as proposed by their local authority is going to adversely affect those children who have been identified as being vulnerable and at risk, including those with special education needs and their parents who also benefit from this high quality provision.’ There have also been criticisms of inconsistencies between local authorities’ base hourly rates and their approaches to supplements for funding early years settings. However the Government claims that this not necessarily a bad thing: they may merely show necessary sensitivity to local circumstances and needs. The Government states that ‘Local authorities are well positioned to set rates, and should be doing so with the approval of the Schools’ Forum, including representatives of all sectors. It should be noted too that some LAs have pursued a strategy of lower base rates with higher supplements. This means direct read across between different local authorities rates may not in many circumstances be possible. Differences in funding rates are in any case a local matter.’ The Government also says that it is there to help the transition. For example, the Education Department intend to collect a range of practices and experiences from LAs who have already implemented in order to help simplify the process for others. The Department has also published comparative benchmarking data so those authorities still developing their formulae can see if they are broadly in line with those who have already implemented the EYSFF.
Select Committee report on the Early years single funding formula (EYSFF): the government’s response