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Early Years Central Expenditure 2016-17
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Report title: Early Years Central Expenditure 2016-17
Meeting date: 21 October 2015
Report originator: Ophelia Carter and Angela Scattergood
1. Purpose of the report
1.1. For Schools Forum to agree the centrally retained budget levels within the Early Years Block of the Dedicated Schools Grant (DSG).
2. Recommendations
2.1. That Schools Forum agrees the proposed early years central spend in principle, noting that the final figures are not confirmed pending future census data.
3. Background
3.1. Agreement of the centrally funded early years budget in the DSG is the responsibility of the Schools Forum. The DSG is allocated to authorities in three funding blocks using historic spend patterns: the Schools Block, the High Needs Block and the Early Years Block. The total DSG is considered as a whole at local authority level and allocated between the three blocks after an assessment of local circumstances, including priorities, risks and current expenditure pressures.
3.2. In July 2015 the Department for Education issued a call for evidence asking authorities to report back on the services covered in the centrally retained early years budget. It is anticipated that this will be used to further compare authorities and develop a national model for funding. The outcome is expected to be in place for 2016-17. This will drive the way that early years funding should be distributed, both from central government to local authorities and from local authorities to institutions. In advance of this, local authorities still need to plan and deliver services to meet local need.
3.3. The schools revenue funding 2016 to 2017[1] an operational guide was also published by the DFE to assist local authorities plan for the following year. With regard to the Early Years Block, it was stated that: the early-years-block-per-pupil unit of funding in 2016 to 2017 will be confirmed after the spending review and will continue to be based on participation. The spending review is due to be published on the 25th November 2015. The guide also included the timetable below, with relation to the Early Years Block:
Date / DFE/EFAWeek commencing 14 December 2015 / Publication of DSG Schools Block and High Needs Block allocations for 2016 to 2017 (prior to academy recoupment).
Publication of provisional Early Years Block allocations.
June 2016 / Early Years Block updated for January 2016 Early Years pupil numbers
June 2017 / Early Years Block updated for January 2017 Early Years pupil numbers (pro rata 7/12ths as this relates only to the period September 2016-March 2017).
3.4. Armed with this limited information, the LA is using 2015-16 budget plans and continuing to work to achieve the best outcomes for pupils across all settings and schools. The early years DSG allocation is calculated using the following factors (Table 1), the final value being confirmed in July 2015. The same format is expected to apply in 2016-17.
2015-16 DSG early years block / rate funded / pupil numbers(fte) / allocation
Hackney / £ / £million
2015-16 3 & 4 year old funding / £7,122.63 / 3,160 / 22.508
2015-16 2 year old funding (provisional) / £5,766.50 / 592 / 3.414
2015-16 early years pupil premium / 0.530
2015-16 total early years block (£million) / 26.451
Table 1
3.5. Without considering the impact of a change in the pupil numbers, this report incorporates changes in policy from last year and sets out the plans to be ready for national policy changes announced to date. These include:
· planning for the expansion of free entitlement eligibility to 30 hours per week for 3 and 4 year olds of working families from September 2017;
· continued expansion of the 2 year old capacity;
· embedding the early years pupil premium (EYPP) for disadvantaged 3 and 4 year old’s accessing the free entitlement.
These changes (see section 4) will affect both centrally retained and delegated budgets, with centrally managed capacity building leading to increased future delegation.
3.6. The balance between delegation and central funding in 2015-16 is shown in Table 2 below. The local authority is planning to retain the same balance in planning for 2016-17.
Delegated and Central Expenditure / 2015-16 budget% / £
Planned delegation to schools & settings- free entitlement &FT / 83.2% / 22,428,000
Subsidised childcare (PVIs full time places for vulnerable pupils) * / 5.0% / 1,352,000
Total planned delegation to schools and settings / 87.2% / 23,834,000
Family advice & support / marketing of entitlement / 2.0% / 557,400
SEN, Portage; safeguarding, combating disadvantage / 3.6% / 993,000
Quality improvement, curriculum support, workforce development / 1.7% / 464,900
Capacity building / 4.0% / 1,103,000
Management, funding, data collection & compliance / 1.3% / 359,000
Planned expenditure managed centrally / 12.8% / 3,477,300
Total Planned Expenditure / 100% / 27,257,300
Table 2
Table 2
*The subsidised childcare budget, set aside to fund full time vulnerable pupils in non-school settings, is considered by the Department for Education (DFE) to be centrally managed but is passported directly to settings.
4. Delegation
4.1. In 2015-16, the LA committed to increase the hourly rate for the free entitlement for 3 and 4 year olds to achieve an overall minimum published hourly rate of a £5.75. In 2016-17, decisions on the hourly rate will await the outcome of the budget setting, the DFE spending review to be announced before Christmas, and the January census. In principle the local authority intends to maintain the current hourly rate as a minimum.
4.2. Free entitlement for three and four year olds of working families (where both parents/a lone parent work/s eight hours or more a week) will be increased to 30 hours a week in September 2017. This development will require significant provision and capacity planning across the LA, especially for those schools that have maximised part time places.
4.3. This is likely to be funded through either a transitional specific grant or as an addition to the 2016-17 DSG. However, if the rate of funding follows the principle of 2 year old funding and is allocated on a fixed hourly rate, it could fall short of current local expenditure levels. This will need to be considered once the plans, conditions and timetable are confirmed before implementation.
4.4. Increasing take up of 2 year old places. The local authority will continue to fund 2 year olds at the national rate of £6.08 per hour. Hackney is continuing to work with settings and schools to develop quality provision for 2 year olds. Hackney also set aside an under-spend of 2 year old place funding in 2014-15. This will be carried forward to continue to apply to creating new places in 2016-17.
4.5. Work to increase the take-up of the early years pupil premium to target deprivation in 3 and 4 year olds in nursery settings is continuing. The main focus is to raise awareness with schools and settings, to support them in encouraging parents to declare eligibility and to deploy resources to narrow achievement gaps
4.6. The Subsidised Childcare Budget targets vulnerable pupils and low income families for part time/full-time places in PVI settings, and is managed through a commissioning process. The authority requires settings to use the allocation of part time and full time places for children from low income families and parents returning to or taking up training or employment. £1,352,000 is being delegated to providers.
5. Central expenditure
5.1. The overall budget estimate for 2016-17, for the purposes of this report, is anticipated to be the same as in 2015-16, with any real terms increase to be delegated to schools and settings.
5.2. The chart below shows the levels of centrally managed DSG across our neighbouring boroughs over the past two years, illustrating how we compare. The LA budgeted to keep a similar level of centrally retained funding in 2015/16 as in 2014/15.
Figure 1 (source DfE SFR)
5.3. The 2015-16 two year old funding allocations announced in July are provisional and may be updated, following LA submission of the October 2015 census. Although Hackney set a budget to achieve the target delegation of 2 year old funding during 2015-16, it is apparent that (as with most London boroughs) this may not be achieved.
5.4. In order to plan services and communicate plans to schools and settings, Forum is being asked to agree in principle to similar levels of centrally retained budget as in 2015-16. The under-spend from 2014-15 place funding will be added to the DSG, to reinforce take up and develop other early years priorities.
5.5. Funding for Family advice & support / marketing of entitlement is deployed through Hackney’s Family Information Service which amongst other activity plays a vital role in supporting families to access childcare and free entitlements, collecting and collating capacity and occupancy information, and running our marketing campaigns.
5.6. SEN, Portage; safeguarding, combating disadvantage. This budget covers support for early identification and assessment for children under 5 and targeted resources for those with high needs. Funding is used for places and additional support for individual children to facilitate early assessment in schools and settings. This budget also targets training and support in all relevant settings and provides a dedicated early years safeguarding officer.
5.7. Quality improvement, curriculum support, workforce development. This is focussed on increasing the number of children who access good and outstanding provision and on supporting access for vulnerable children. Current priorities include supporting improved quality in the independent school sector, where a large number of children access the free entitlement; narrowing achievement gaps for identified groups (including through EYPP); brokerage and strategic management of partnerships with Health.
5.8. Capacity building. LAs have a duty to ensure that there is sufficient childcare and early learning provision for working parents and to deliver the free entitlements. This budget supports the early years business support functions accessed by both schools and the PVI sector.
5.9. Management, funding, data collection & compliance. This budget includes costs of management and administration of the parts of the early years service related to funding block activities, including strategic planning, financial and administrative management of funding streams, processes and data collection and statutory submissions. Monitoring fair access is an element of this function.
6. Early Years Performance and Improvement
6.1. The LA is committed to raising achievement and narrowing gaps at age 5 (Good Level of Development, GLD). In July 2015, 67% of 5 year olds in Hackney achieved a GLD. This is a 2% improvement upon Hackney’s 2014 GLD (Figure 1).
Over the past 6 years the number of children reaching a GLD has risen from 35% in 2009 to 67% in 2015. A significant part of this improvement is the result of the activities delivered via services funded by the LA, with the support available to all providers making effective use of the centrally retained DSG.
Figure 1- GLD, Hackney against national 2009-2014
6.2. A further aspect of the impact of local authority activity and support to early years settings is the improvement in the quality of provision in Hackney. The percentage of Ofsted good/outstanding registered childcare setting settings improved from 82% in June 2014 to 86% in June 2015. 82% of childminders had been judged good/outstanding in June 2015. There is significant work to be done within the independent school sector, with 61% good/outstanding (June 2015).
6.3. Activities supported by centrally retained DSG have been effective in contributing to a consistent improvement in outcomes and the quality of provision in early years and will continue to sustain this level of improvement. These involve:
· Targeted support for settings causing concern or ‘requiring improvement’, mirroring the schools’ SRAS process, focussing both on educational outcomes, safeguarding and welfare standards.
· Leading professional development networks (PDNs) across the sector within clusters- including the schools’ EYFS Co-ordinators’ Forum, childcare setting PDNs and the Interlink Partnership of providers from the Charedi community.
· Co-ordinating partnership working with schools, settings, SEN & Early Support, children’s centres and health visitors
· Leading cross borough projects to identify and address achievement gaps
· Supporting innovations to develop outstanding practice, particularly around Early Intervention and the Home Learning Environment, e.g. EYPP, REAL (Raising Achievement in Early Literacy) and the Integrated Developmental Review (health & education).
· Developing borough strategies for the Early Years Pupil Premium and new Reception Baseline Assessment.
· Continuing to improve the proportion of good or better settings across the sector with particular focus on the independent sector.
7. Comments from other sections
7.1. Head of Management Accounts (HLT)
As demonstrated in the report, Early Years Block funding centrally managed by the local authority is vital for ensuring that Hackney retains Early Years expertise and works towards the continual improvement of provision across the borough.
7.2. Hackney Legal Services
The proposals for Early Years Central Spend are in accordance with the DFE School Revenue Funding 2016-2017 Operational Guidance. The Schools Forum should note whilst the proposals can be agreed in principal they are subject to the outcome of the forthcoming DFE Spending Review.
8. Implications for academies and free schools
All places are commissioned from providers on an equal basis. Academies and free schools early years funding is allocated in line with our agreed funding formula.
9. Conclusion
The local authority seeks agreement in principle for the proposed central spend levels and that Forum notes the plans to sustain pupil achievement.
Report originator: Ophelia Carter, Head of Schools Finance
Other contributors:
Name / Designation / Section /Angela Scattergood / Head of Early Years / School Performance and Improvement
Sara Walsingham / Grant Development Manager / Finance
Date cleared by –
· Head of Business Services: 12 October 2015
· Assistant Director, Finance (CYPS): 9 October 2015
· Education Director & Head of Hackney learning Trust: 14 October 2015
[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445686/Schools_revenue_funding_2016_to_2017_operational_guide_publication_version_final.pdf