Introduction

The early education and childcare statutory guidance for local authoritiesSeptember 2017 from the Department for Education (DfE) recommends all authorities should considerpaying providers monthly from 1 September 2018. We are now consulting all Early Years providers on whether to maintain the current method or move to monthly payment arrangements. We can provide one payment method from September 2018, so it is important that we understand the views of Early Years providers on which method would suit them best before we make a decision. We would therefore encourage all Early Years providers to read the information in this document and respond to the consultation using the online form at:

Current payment method

The first payment in a term is called the estimate claim. Towards the end of each term KCC’sManagement Information Team contacts you by email to invite you to complete an estimate claim. Based on the information provided, Management Information then makes a payment on or before the first day of term. This is called the Interim Payment and is calculated for half the term to provide you with cash flow until the balancing payment is made.

The second payment is based upon a mandatory data collection which occurs three times a year, a few weeks after the start of each term known as headcount week. This collects the details of the children who are attending your setting and who wish to claim the Free Early Education with you for the current term. A balancing payment is then calculated for the whole term using this information and deducting any interim payment that may have been made. This payment is made at the start of the second half of the term.

For example, for the autumn term the setting receives 50% of the funding in September and the remaining balance is paid by November for the period September to December.

KCC believes this current method gives providers a cash flow advantage.

Monthly payment method

The data collection for Management Information wouldnot change from current arrangements. The payments would be spread evenly across each monthfor each term with adjustments being made where numbers change from estimate to headcount. These paymentswould be paid at the end of each month.

For example, for the autumn term the setting would receive 25% of the funding each month starting In September with the last payment being paid in December.

Examples

Below are twoexamples for the academic year 2017-18 to compare the current payment system to a monthly system.

Example 1 is for a setting with 20 children.

Example 2 is for a setting with 2 children.

Term / From / To / 38 Weeks
Autumn 2017 / 01/09/17 / 31/12/17 / 14
Spring 2018 / 02/01/18 / 15/04/18 / 11
Summer 2018 / 16/04/18 / 31/08/18 / 13
Example 1
Children / Hours / Rate / Total for 38 Weeks
Interim / 20 / 15 / £4.00 / £45,600.00
Balancing / 20 / 15 / £4.00 / £45,600.00
Month / Current Payment Method / Monthly payment / Accumulative Current / Accumulative Monthly / Difference
September / 04/09/17 / Interim / £8,400 / £4,200 / £8,400 / £4,200 / -£4,200
October / 30/10/17 / Balancing / £8,400 / £4,200 / £16,800 / £8,400 / -£8,400
November / £4,200 / £16,800 / £12,600 / -£4,200
December / £4,200 / £16,800 / £16,800 / £0
January / 04/01/18 / Interim / £6,600 / £3,300 / £23,400 / £20,100 / -£3,300
February / 19/02/18 / Balancing / £6,600 / £3,300 / £30,000 / £23,400 / -£6,600
March / £3,300 / £30,000 / £26,700 / -£3,300
April / 16/04/18 / Interim / £7,800 / £3,300 / £37,800 / £30,000 / -£7,800
May / £3,900 / £37,800 / £33,900 / -£3,900
June / 04/06/18 / Balancing / £7,800 / £3,900 / £45,600 / £37,800 / -£7,800
July / £3,900 / £45,600 / £41,700 / -£3,900
August / £3,900 / £45,600 / £45,600 / £0
Example 2
Children / Hours / Rate / Total for 38 Weeks
Interim / 2 / 15 / £4.00 / £4,560.00
Balancing / 2 / 15 / £4.00 / £4,560.00
Month / Current Payment Method / Monthly payment / Accumulative Current / Accumulative Monthly / Difference
September / 04/09/17 / Interim / £840 / £420 / £840 / £420 / -£420
October / 30/10/17 / Balancing / £840 / £420 / £1,680 / £840 / -£840
November / £420 / £1,680 / £1,260 / -£420
December / £420 / £1,680 / £1,680 / £0
January / 04/01/18 / Interim / £660 / £330 / £2,340 / £2,010 / -£330
February / 19/02/18 / Balancing / £660 / £330 / £3,000 / £2,340 / -£660
March / £330 / £3,000 / £2,670 / -£330
April / 16/04/18 / Interim / £780 / £330 / £3,780 / £3,000 / -£780
May / £390 / £3,780 / £3,390 / -£390
June / 04/06/18 / Balancing / £780 / £390 / £4,560 / £3,780 / -£780
July / £390 / £4,560 / £4,170 / -£390
August / £390 / £4,560 / £4,560 / £0

How to give your views

Once you have read the information in this document, please go online to to complete a short questionnaire to give your views. The Equality Impact Assessment is also available on the webpage and we welcome your views on this in the questionnaire.

The consultation will run from 26 March to 27 April 2018.

Responses to the consultation will be considered before a decision is made on which payment option to use from 1 September 2018. We will inform all Early Years providers of the outcome in the next available Early Years and Childcare bulletin after the decision has been made.