Proposed Changes to the Early Years Single Funding Formula for the Free Entitlement for 3 & 4 Year Olds from April 2017
Provider Consultation Outcomes
The consultation documents were emailed on 5th January 2017to the following Free Early Education providers:
Childminders 90
Day Nurseries 20
Pre Schools Private17
Pre Schools Voluntary15
Maintained Nurseries 3
Independent Nurseries2
Total issued 147
Response Rate
Type of Setting / Total Issued / Response (Number) / Response(%)
All Respondents / 147 / 65 / 44%
Childminders / 90 / 42 / 46%
Day Nursery / 20 / 8 / 40%
Pre School (Private) / 17 / 6 / 35%
Pre School (Voluntary) / 15 / 7 / 46%
Maintained Nursery / 3 / 2 / 66%
Independent Nursery / 2 / 0 / 0%
The outcome from each question asked within the consultation document is summarised below, with a response to the points raised.
Q1. Per page 2 of the consultation paper, do you think Poole has the right priorities for funding? If not, what do you think is missing?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 34 / 15 / 7
Childminders / 25 / 5 / 5
Day Nursery / 6 / - / 2
Pre School (Private) / - / 5 / -
Pre School (Voluntary) / 1 / 5 / -
Maintained Nursery / 2 / - / -
Independent Nursery / - / - / -
Feedback from providers
Most Day Nurseries that responded to this question agreed,with one Day Nursery agreeing with some of the priorities. Only one Pre School agreed,with the remainder expressing feelings that the Borough’s priority for flexibility and longer opening hours has no evidence base looking forward, and the criteria proposed made the supplement unobtainable for providers restricted by their premises.
Most childminders who responded to this question agreed Poole’s priorities however many commented about flexibility insofar as they are a flexible sector of the market however the criteria proposed and the reduction in funding rate is causing concern. Some were also concerned about the Borough retaining its excellent high quality childcare provision with our proposed funding rates.
Local Authority response
The childcare market will need to change to respond to the incoming entitlement of 30hrs for working parents. The Borough is currently weighted towards term-time only provision and although we expect to have enough places Borough-wide it’s important to note that the hours currently available for working parents may not suit their needs. Having a flexibility supplement is intended to incentivise providers to consider extending their hours and weeks where possible and where it is right for their business.The Local Authority intends to continue working towards more flexible childcare and continue its additional financial support to improve the good learning development for children of a deprived background. With regard to quality of providers, all local authorities are limited by government regarding the use of supplements to incentivise the market. From 2017 we can no longer use a Quality Supplement linked to Ofsted outcomes.
Q2. A maximum 10% of government funding may be used for supplements. A supplement for deprivation is a mandatory requirement. Currently 6% of the available funding is used for a deprivation supplement and there are no plans to change this.
a)Do you think the deprivation supplement is reaching the right children?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 22 / 0 / 1
Childminders / NA / NA / NA
Day Nursery / 7 / - / 1
Pre School (Private) / 6 / - / -
Pre School (Voluntary) / 7 / - / -
Maintained Nursery / 2 / - / -
Independent Nursery / - / - / -
Feedback from providers
All but one Day Nursery, Pre School and School Nursery agreed that the process for determining eligibility for the Deprivation Supplement is working well. The remaining Day Nursery was unsure.
Childminder’s have not been eligible to receive the deprivation supplement and many had no experience of children considered to be from a deprived background. Although unable to answer this question specifically several indicated there are very few deprived children in Poole and the percentage attached to this supplement is too high.
Local Authority response
It is pleasing that our school and group providers feel the supplement is working. The increase in Early Years Foundation Stage Profile Good Level of Development (GLD) supports this. The supplement is new for childminders, per the proposal, and their only current exposure, financially, to children of a deprived background would be children eligible for 2 year funding or Early Years Pupil Premium (EYPP). For background in relation to the deprivation supplement, in 2016 around 30% all 3 and 4 year old children had the 80p per hour deprivation supplement added to their provider’s hourly rate for that child. As the GLD scores are increasing the local authority intends to continue with the deprivation supplement at its current rate as indications are it is having a positive effect on the learning of our young children.
b)Do you think the deprivation supplement is improving the outcomes for children in your setting? If not, can you suggest how the eligibility or use of the supplement could be improved for future years?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 19 / - / 2
Childminders / NA / NA / NA
Day Nursery / 7 / - / 1
Pre School (Private) / 6 / - / -
Pre School (Voluntary) / 6 / - / 1
Maintained Nursery / - / - / -
Independent Nursery / - / - / -
Feedback from providers
All group PVI’s who were able to answer the question agreed the supplement is improving outcomes for their children.
Childminders will not yet have had children that attracted that supplement however gave very positive news and examples regarding children who had been funded with them as a 2 year old. Some childminders felt the supplement would not have any effect on their care for that child, but only for the fact that children are given extra support already with that provider where needed.
Local Authority response
We are pleased providers that have been receiving this supplement agree that it is improving outcomes for their children and intend to continue with the current system of determining eligibility (previously funded as a 2 year old in Poole, or currently an EYPP entitled child).
c)Do you think the proposal to introduce a 4% flexibility supplement, equivalent to 25p per hour, is the right approach? If not, can you suggest alternative ways to help increase flexible provision for our working parents?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 12 / 43 / 4
Childminders / 4 / 30 / 2
Day Nursery / 6 / 1 / 1
Pre School (Private) / 1 / 5 / -
Pre School (Voluntary) / - / 6 / 1
Maintained Nursery / 1 / 1 / -
Independent Nursery / - / - / -
Feedback from providers
Most childminders in response to this question queried the proposed Flexibility Supplement criteria raised in question 3 rather than respond to the proposal of introducing a Flexibility Supplement. Those responses have been reflected here as a negative answer to the question asked. Childminders who did not directly agree with the question suggested the balance percentage between Flexibility (4%) and Deprivation (6%) should be even or the other way around.
Almost all pre schools did not agree with the introduction of the Flexibility Supplement as, for example, it would be unobtainable due to the limitations of their premises. Some pre schools again highlighted the lack of evidence that more flexible childcare is needed with one suggesting that parents will vote with their feet if a providers hours doesn’t suit that parent’s need. It was also commented that the new proposed supplement further supports Day Nurseries that are already in a position to fulfil the criteria. It was also suggested that the supplement should be reduced, with the difference being returned to base rate.
A school agreed that it is correct to introduce the supplement due to the upcoming needs of working parents and that past supplements have been used effectively.
The question asked drew positive feedback mostly from those who would see an immediate benefit, under the proposed criteria.
Local Authority response
Most respondents did not agree with a Flexibility Supplement as the criteria required to access it was unobtainable for their provision. The criteria are reviewed in Question 3 overleaf.Naturally the supplement will go to providers that already meet our proposed criteria and we agree that it will be hard for preschools restricted by premises to fulfil the needs of working parents. Preschools will continue to provide good quality childcare for their communities but we do need some preschools to look at all options for their provision (using another room, other premises, linking with their local school to offer holiday and wraparound care). We must give our entitled parents more options for their 30hrs entitlement and a flexibility supplement would fit that agenda. It is the local authority’s intention to introduce a Flexibility Supplement as part of its 2017 early years single funding formula, using 4% of the funding budget.
Q3. Given a main objective for the local authority is to encourage more flexibility for working parents and the new 30hrs entitlement from September 2017, do you think our criteria for providers to qualify for the Flexibility Supplement is reasonable? If not, what changes would you suggest and why?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 6 / 58 / 1
Childminders / - / 42 / -
Day Nursery / 6 / 1 / 1
Pre School (Private) / - / 6 / -
Pre School (Voluntary) / - / 7 / -
Maintained Nursery / - / 2 / -
Independent Nursery / - / - / -
Feedback from providers
There was a clear split between providers who would be able to fulfil the criteria required and providers who would not be able to.
No childminder agreed with the proposed criteria, all commenting that 8am – 6pm and 48 weeks a year was an unreasonable request in order to qualify for the supplement. Some highlighted that their working hours often started earlier and ended earlier than the criteria. Many felt the minimum number of weeks asked, while achievable by setting that are not restricted by premises and had several staff to cross work, left the childminder with little personal time off from their self employment. Many also highlighted the longer hours required to qualify for the supplement would impact on their family life.
Schools felt transitional criteria should apply, allowing providers to gradually achieve the proposal while a preschool suggested the criteria should be introduced once the market knows how working families intend to use their entitlement.
Some preschools ask whether they are risking viability if they are opening 8 – 6 and 48 weeks a year, and what if the demand for places isn’t there.
Local Authority response
Further to this consultation and the feedback we had received from our four consultation briefings here at the Dolphin Centre it is the local authority’s intention to alter the criteria applicable to qualify for the Flexibility Supplement.
The consultation had proposed the supplement of 25p per hour (for every free entitlement child) was paid to providers who committed to be available at minimum between 8am and 6pm five days a week and at minimum 48 weeks per year.
The figure of 25p per hour was modelled on an expected take-up of this supplement.
We have now revised, pending final Statutory Guidance from the DfE, theminimum criteriato be a commitment to be available 40hrs per week (hours determined by the provider) and 45 weeks per year, offering parents stretched free entitlement. We believe this new criteria will allow more childminders, group setting and school nurseries to achieve this supplement, or consider their options regarding opening times.
We would expect more settings to now become eligible. Based on the revised criteria, we have estimated an increase of 20%, to 70% of hours overall will be delivered at flexible settings. To stay within the overall funding envelope, we would need to reduce the rate from 25p to 20p.
A reduction in the flexibility supplement leads to a change in the cost of transitional protection. Childminders and schools in the first year are protected at current rates less the flexibility supplement (which they must earn like other settings). In reducing the rate of flexibility by 5p, the protection for these settings increases by 5p (in year 1 only).
The changes are summarised below:-
Number of Hours / Rate £ / Cost £Consultation - Flexibility / 752,488 / 0.25 / 188,122
Final Proposal - Flexibility / 901 064 / 0.20 / 180,213
-Increased Protection* / 0.05 / 7,909
-TOTAL / 188,122
*(Difference between the group settings £3.77 and schools / childminders current base rate less the flexibility supplement is higher than in the consultation)
The tables overleaf show the difference in funding for all providers considering this proposed change. Pre schools who had raised the risk of opening longer hours and not having the anticipated take up are advised to carefully consider their options and business model. It is important that any community preschool gauges interest in their area for extended hours. The Borough do not need every provider to be flexible with their offer, but we do need the ratio gap of one third all year round to two thirds term time only provision to be closer.
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Consultation Formula / Final Proposal to CouncilScenario 1 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Scenario 1 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Change from Consultation
Setting not flexible / Rate / 17/18 / 17/18 / Setting not flexible / Rate / 17/18 / 17/18
Child not deprived / 16/17 / Child not deprived / 16/17
Childminder / 4.54 / 4.29 / 0 / 0 / 4.29 / -0.25 / Childminder / 4.54 / 4.34 / 0 / 0 / 4.34 / -0.20 / 0.05
Group PVI / 3.71 / 3.77 / 0 / 0 / 3.77 / 0.06 / Group PVI / 3.71 / 3.77 / 0 / 0 / 3.77 / 0.06 / 0.00
School Nursery Classes / 4.07 / 3.82 / 0 / 0 / 3.82 / -0.25 / School Nursery Classes / 4.07 / 3.87 / 0 / 0 / 3.87 / -0.20 / 0.05
Scenario 2 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Scenario 2 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Change from Consultation
Setting is flexible / Rate / 17/18 / 17/18 / Setting is flexible / Rate / 17/18 / 17/18
Child not deprived / 16/17 / Child not deprived / 16/17
Childminder / 4.54 / 4.29 / 0.25 / 0 / 4.54 / 0.00 / Childminder / 4.54 / 4.34 / 0.20 / 0 / 4.54 / 0.00 / 0.00
Group PVI / 3.71 / 3.77 / 0.25 / 0 / 4.02 / 0.31 / Group PVI / 3.71 / 3.77 / 0.20 / 0 / 3.97 / 0.26 / -0.05
School Nursery Classes / 4.07 / 3.82 / 0.25 / 0 / 4.07 / 0.00 / School Nursery Classes / 4.07 / 3.87 / 0.20 / 0 / 4.07 / 0.00 / 0.00
Scenario 3 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Scenario 3 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Change from Consultation
Setting not flexible / Rate / 17/18 / 17/18 / Setting not flexible / Rate / 17/18 / 17/18
Child is deprived / 16/17 / Child is deprived / 16/17
Childminder / 4.54 / 4.29 / 0.0 / 0.28 / 4.57 / 0.03 / Childminder / 4.54 / 4.34 / 0.0 / 0.23 / 4.57 / 0.03 / 0.00
Group PVI / 4.51 / 3.77 / 0.0 / 0.80 / 4.57 / 0.06 / Group PVI / 4.51 / 3.77 / 0.0 / 0.80 / 4.57 / 0.06 / 0.00
School Nursery Classes / 4.87 / 3.82 / 0.0 / 0.80 / 4.62 / -0.25 / School Nursery Classes / 4.87 / 3.87 / 0.0 / 0.80 / 4.67 / -0.20 / 0.05
Scenario 4 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Scenario 4 / Total / Base Rate / Flexibility / Deprivation / Total Rate / Change from 16/17 / Change from Consultation
Setting is Flexible / Rate / 17/18 / 17/18 / Setting is Flexible / Rate / 17/18 / 17/18
Child is deprived / 16/17 / Child is deprived / 16/17
Childminder / 4.54 / 4.29 / 0.25 / 0.28 / 4.82 / 0.28 / Childminder / 4.54 / 4.34 / 0.20 / 0.23 / 4.77 / 0.23 / -0.05
Group PVI / 4.51 / 3.77 / 0.25 / 0.80 / 4.82 / 0.31 / Group PVI / 4.51 / 3.77 / 0.20 / 0.80 / 4.77 / 0.26 / -0.05
School Nursery Classes / 4.87 / 3.82 / 0.25 / 0.80 / 4.87 / 0.00 / School Nursery Classes / 4.87 / 3.87 / 0.20 / 0.80 / 4.87 / 0.00 / 0.00
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Q4. There is a national requirement for base rate funding to be the same for all local providers by April 2019. This replaces the current requirement to reflect the different costs between types of providers - group private voluntary and independent (pvi) settings, schools and childminders. Some providers will see a reduction in base rate funding per hour.
Do you agree that we should protect providers who will see a reduction in funding by taking a phased approach over three years? This is to allow time for them to consider their options, adapt provision if needed and to remain financially viable to support the growth in demand for places. If not, why not?
Type of Setting / Yes / No / No Definitive AnswerAll Respondents / 32 / 11 / 17
Childminders / 15 / 5 / 17
Day Nursery / 7 / 1 / -
Pre School (Private) / 4 / 2 / -
Pre School (Voluntary) / 4 / 3 / -
Maintained Nursery / 2 / - / -
Independent Nursery / - / - / -
Feedback from providers
Most group and both school nurseries agreed that a transitional approach to reducing funding was an appropriate way to support providers that inevitably will see a fall in funding rate, per the government’s requirements.
Some group providers, although agreeing with the protection in principal, felt the phased protection should be given over two years, rather than three.
Childminders were disappointed with the funding rate being lowered and some indicated this reduction is reason to reconsider their profession as a childminder. Several who disagreed asked if the rate could be split evenly across the three years rather than start high and end lower.A number of responses did not answer this specific question directly.
Local Authority response
It is unfortunate that some childminders have declared their intentions to cease working as a childminder. We have been given this directive to bring parity across the sector from government and cannot change that, but we hope by proposing the phased reduction in funding and the new proposed Flexibility Supplement criteria will support all childminders, and potentially school nurseries, to minimise the reduction in income faced. Splitting the funding rate across three years would not be possible, as every provider in the sector needs to be paid the same rates by year three. It might be possible to split the first two years evenly, but as parity is required by year three, a gradual approach is appropriate.
We feel it’s important to support our childminders and school nurseries as far we are allowed, therefore it’s the local authority’s intention to continue with transitional protection and a phased approach.
Q5. Childminder and Schools Specific: We need to reduce hourly funding for schools and childminders to comply with Government requirements. Although delivering only a relatively small number of hours these providers are as important and valued by parents as group PVI settings. Please tell us how these changes might affect your business (for instance longer opening hours, evening and weekend working, additional staff support)?
Type of Setting / ResponseAll Respondents / 44
Childminders / 42
Day Nursery / NA
Pre School (Private) / NA
Pre School (Voluntary) / NA
Maintained Nursery / 2
Independent Nursery / -
Feedback from providers
Every childminder and school nursery responded to this question. Some childminders gave examples of how their income would reduce by four figures considering our proposals. Others commented that the proposals will bring the free entitlement hourly rate below that which is currently being charged privately. There were several examples given of how the proposals will restrict some childminders to only taking free entitlement children that can commit to 10 hour days and some childminders advise will not longer accept free entitlement children as a result of these changes. Some were concerned that the proposed funding rates will restrict a childminder from employing an assistant worker, who would need to be paid at statutory minimum wage.