[PPT] - and changes to the way the 3 and 4 year old entitlements to childcare PowerPoint Presentation

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Consultation: Early Years National Funding Formula and changes to the way the 3 and 4 year old entitlements to childcare are funded September 2016 Early Years Funding Policy Team Department for Education

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Thank you! We’ve received

ver 750

responses to

ur online survey

so far

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Each local authority receives an hourly funding rate from DfE through the Dedicated Schools Grant Local authorities distribute funding to providers according to each local authority’s ‘Early Years Single Funding Formula’ Local authorities (retain some funding for central services)

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The national funding system

Each local authority receives an hourly funding rate from DfE through the Dedicated Schools Grant

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Local authorities distribute funding to providers according to each local authority’s ‘Early Years Single Funding Formula’ Local authorities (retain some funding for central services)

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The local funding system: central spend

Local authorities (retain some funding for central services)

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Each local authority receives an hourly funding rate from DfE through the Dedicated Schools Grant Local authorities distribute funding to providers according to each local authority’s ‘Early Years Single Funding Formula’

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The local funding system: provider rates

Local authorities distribute funding to providers according to each local authority’s ‘Early Years Single Funding Formula’

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Each local authority receives an hourly funding rate from DfE through the Dedicated Schools Grant Local authorities retain some funding for central services

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Schools in some areas are funded significantly more per hour than private and voluntary providers. Private and voluntary providers in some areas are funded significantly more per hour than schools.

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Principles

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Underpinning Principles

1. Maximise funding to the front line
2. Allocate funding fairly to local authorities and to different types of provider
3. Distribute funding efficiently and effectively
4. Allocate funding transparently
5. Target effectively additional funding to those children who need it
6. Avoid excessive turbulence

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National funding reform

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The early years national funding formula

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Each factor of the national funding formula

Additional needs metric based on:

FSM eligibility
English as an

additional language (EAL)

Disability Living

Allowance (DLA) for 0-5 year olds Area Cost Adjustment based on the general labour market measure, adjusted for premises costs. Base Rate based on the core costs of childcare provision which do not vary by local area

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Impact and transition

The vast majority of local authorities (75%) see increases in their hourly funding rate. No local authority will see reductions of more than 10%

verall (funding floor) and no more than 5% each year.

Indicatively – and depending on local authority funding decisions – private & voluntary providers gain in nearly 90% of areas, schools in nearly 80% of areas. Indicative average increase of 16% for private and voluntary providers and 14% for schools.

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Local funding reform

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Maximising funding to providers

All local authorities will be required to pass through at least 95% of their Government funding to providers. Transitions: Going straight to 95% could be disruptive for some areas. So the policy would start at 93% in 2017-18 and move to 95% by 2018-19.

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Levelling the playing field between different providers

All local authorities will be required to use a universal base rate

f funding for all providers.

Transitions: We would allow local authorities until 2019-20 to implement a universal base rate. We’d push for this to happen sooner if possible and we plan to monitor progress here.

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A focused use of supplements

A focused use of local authority supplements will mean that providers can understand how their funding rates have been worked out. Propose supplements that reflect key cost drivers:

Deprivation (required)
Rural or sparse populations

And to provide incentives for providers going the extra mile with:

Flexibility
Additional 15 hours of free childcare
Operating efficiently

We propose 10% cap on the amount of money that local authorities can channel through supplements.

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Reforming funding for disabled children

We recognise the current funding system does not serve the needs

f children with special educational

needs and disabilities (SEND) consistently well. We therefore propose targeted disability access funding. £12.5m available. Providers will automatically receive additional funding for every child in their setting in receipt of disability living allowance.

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Reforming funding for children with special educational needs (SEN)

Meeting the needs of children with SEN costs more than standard per-child

funding. There has often been a lack of

clarity about who covers this cost. We propose that local authorities should pool funding from early years and / or high needs DSG to create local SEN Inclusion Funds. This is not a new funding stream but puts in place a new structure in local funding systems.

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SEND Top-ups

An overview of funding consultation proposals

22 Additional needs factor based on three metrics: Department for Education would use an Early Years National Funding Formula to allocate funding to 151 local authorities using… …each local authority would use their reformed Early Years Single Funding Formula to allocate funding to their local providers… …so around 35,000 providers deliver the free entitlements.

FSM DLA EAL

Base rate Area Cost Adjustment Early Years Pupil Premium

Local area funding supplements

Deprivation Disability Access Funding

Universal base rate

30 hours delivery Flexibility Rural areas Efficiency Limited central spend SEN Inclusion Fund

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Consultation: Early years funding Changes to funding for 3 and 4 year olds

Take part in our consultation by reading our proposals and visiting the survey site between Thursday 11th August and Thursday 22nd September. We ask your views on changes to the way funding works for both for the existing free entitlement for 3 and 4 year olds and the extended 30 hour entitlement for working parents. This factsheet gives a summary of our key proposals. We look forward to hearing your views.

What are we proposing?

Fairer fundi ding ng for Local Autho horities Introducing a national funding formula to allocate a record level of investment, including an additional £1billion by 2019-20, fairly and transparently. Maximum fundi ding ng to provide ders All local authorities to pass on the vast majority (95%) of funding direct to childcare providers.

95%

Fairer fundi ding ng for provi vide ders Childcare providers in each local authority y area area to receive the same basic rate of funding for every hour of the free entitlements. Greater transpa sparenc ncy y for provi vide ders More targeted use of local author

rity

y funding supplements to incentivise providers to meet the needs of parents. Addition

nal funding

ng for children n with SEND Targeted additional funding for providers to support disabled children and a new local authority approach to supporting children with special educational needs.

What does it mean for the early years sector?

The vast majority of local authorities and providers to see increases in their average hourly funding rates. A more level playing field for different types of provider, which is more transparent and easier to understand.

£3.9bn

Government fulfils its promise of a higher national average hourly funding rate, increasing from £4.56 to £4.88. A new approach for disabled children and children with special educational needs with extra funding to help them access and benefit from the free entitlements.

£4.88

A record £3.9bn funding per year from 2019-20 to ensure we can expand the free early years entitlements from 15 to 30 hours a week.

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We want providers to be confident delivering 30 hours of free childcare

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DfE funding consultation Local authority funding consultations LAs confirm final rates to providers

Closes 22 September Autumn: Government response Winter Early spring Indicative average rates for providers in each local authority announced Make planning assumptions Local authority and provider discussions Increasing certainty on local approach and final provider rates Certainty in advance of financial year 2017-18

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The early years capital fund

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Through the Early Years Capital Fund, the government is making £40 million worth of capital grants available to early years settings (this may include schools that currently offer, or plan to

ffer, provision for 3- and 4-year olds) through a local authority-led bidding process.

Other investment opportunities - The DfE is procuring a Fund Manager to oversee a loan finance fund designed to leverage in additional investment to create 30 hour places. We will be sharing more details on this in the coming months.

December 2016 DfE announces successful bids and funds are awarded. Building begins. April 2016 The DfE puts out a call for Expressions

f Interest from

LAs. 21 June 2016 LAs informed of project cap and bid window

pens.

August 2016 LAs submit 4-6 project bids and bid window closes on 31st August. 149 LAs submitted EOIs Sept - Nov 2016 Bids assessed, and decisions are Quality Assessed thoroughly. 149 LAs who submitted EOIs invited to submit bids

Successful bids: TBC TBC no. of LAs submitted bids

The priority for this bid round is ensuring funding is target at areas where Local Authorities can provide

clear evidence of LOCALISED SUFFICIENCY NEED for 30 hours places.

Other core criteria for the assessment phase are:
OUTCOMES – place creation, quality, deliverability
VALUE FOR MONEY – reasonable and clearly evidenced costs, 25% of funding requested from

alternative sources.

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Please share your views with us

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Please respond online by 22 September 2016: https://consult.education.gov.uk/early-years-funding/eynff If you have any enquiries or questions about the consultation, please contact the Early Years Funding Team at: EarlyYearsFundingReform.CONSULTATION@education.gsi.gov.uk We can only accept your consultation response via the online survey, above, so please don’t submit your response to this inbox. Our team: Katy Willison & Jessie Hamshar  Richard Simper (Deputy Director) Alan Krikorian (Early years funding lead) Dan Evans (Early years funding policy) Laura Bryant-Smith (Consultation and communications)

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