Agenda item

Avril Allenby introduced the report, which set out the proposal for the Early Years Budget, which was based upon the recommendations of the Early Years Funding Group.

The Early Years budget had always been difficult to set. It had been affected by changes to the funding formula and also by changes in what was being offered to parents from September 2017 (from 15 to 30 hours of free childcare for working parents of three and four year olds).

Gabrielle Esplin reported that the financial position for the Early Years Block was better than originally anticipated. This was because the take up by parents of the additional 15 hours had been slow. The budget for payments for the additional 15 hours was based on the Department of Education’s estimate of take up of approximately 165,000 hours per terms. Actual intake had only been 110,000 hours in the autumn term and was estimated to be 127,000 hours in the spring term. Forecast spend on provider payments was therefore expected to be £611,000 below budget. The final level of funding for 2017/18 was based on the January 2018 census, and the number of early years hours had been significantly higher in the spring term than the autumn term. For this reason the reduction in funding from the budgeted level was only £384,000 and this gave a forecast net underspend of £227,000, which would bring the deficit down to £33,000 by the end of the current financial year.

Gabrielle Esplin highlighted that the table under section 3.6 (page 42) showed estimated funding for 2018/19.

Taking all the factors into account it had been forecast that it would be possible to increase the basic provider base rate and quality rate by 1.2% in 2018/19 (£4.30 and £0.66 per hour respectively). Avril Allenby added that providers had not seen an increase in basic rates for five years.

Suzanne Taylor stressed that smaller providers had closed across the district due to the funding rates. Ensuring there were sufficient places to be able to offer the 30 hours to working parents was an ongoing challenge. Although only a small increase in basic rates was being proposed, Suzanne Taylor explained that it would serve as a gesture to providers and would help them support places to children who required them.

David Ramsden was confused as to why estimated figures were so inaccurate within the Early Years Block. Gabrielle Esplin explained that the budget had been set based on two terms however, the take up of the additional hours had been much lower than the DfE had estimated. Avril Allenby reported that the slow uptake had been partially caused due to the requirements for parents to assess their own eligibility and these issues had now been resolved. Suzanne Taylor added that the Early Years Budget had always been particularly difficult to predict. Claire White explained that this was because funding was based on the January census, assuming this was an average of actual take up throughout the year which was not usually the actual position. For 2017/18 the January census is higher than the annual average take up.

Claire White reported that she had been concerned that the DfE might not provide the funding for the additional hours based on seven twelfths of the January 2018 census due to the fact it was significantly greater,  however, she had checked this and the DfE had verbally confirmed that they would be providing the full seven twelfths of funding.

Ian Pearson added that it was important to note that a number of provider budgets were supported by the Minimum Funding Guarantee, which would stop in 2019/20.

The Chairman invited the Schools’ Forum to vote on whether they agreed with the recommendations set out in section two of the report. Patrick Mitchel proposed that the Schools’ Forum agree the recommendations and this was seconded by Graham Spellman. At the vote this motion was carried.

RESOLVED that the Schools’ Forum agreed the following recommendations:

1)    To agree the two year budget model for the Early Years block, as set out in section 5 of this report.

2)    To agree the following provider funding rates for 2018/19:

·         Increase the three and four year old base rate by 1.2% from £4.25 to £4.30 per hour.

·         Increase the three & four year old quality supplement by 1.2% from £0.65 to £0.66 per hour.

·         Three and four year old deprivation supplement to remain the same at £0.47 per hour.

·         Two year old rate to remain the same at £5.45 per hour.

·         The maintained nursery school lump sum supplement to remain the same at £133,810 per school.

·         A minimum funding guarantee of 10% (meaning no provider will see a reduction in their rate of more than 10% of their 2016/17 rate).

·         A cap on increase in funding rate of 10% (meaning no provider will see an increase in their rate of more than 10% of their 2016/17 rate).