Agenda item



Members received a report which considered the Local Authority proposals for the funding of providers of early years education in financial year 2019-20 following notification by the Department for Education of indicative funding allocations and consultation with providers.


The DfE funding rate for Havering was £5.28 for 3 and 4 year olds and £5.66 for 2 year olds, the same as in 2018-19.  On the basis of current participation and anticipated growth, the Local Authority estimated that £16,946,754 funding would be received for 3 and 4 year olds in the 2019-20 financial year, and £2,179,151 for 2 year olds.


In 2018-19 the amount of funding retained centrally was within the 5% permitted at £730,000.  With an increase in participation in 2019-20 the financial value of the 5% had also increased.  During 2019-20 it was intended that the software supporting the submission and management of data would be reviewed which would increase the central costs.  Therefore an additional £70,000 was requested from the central retention.  Early Years Providers expressed disappointment that the funding would not go back into early years provision and believed that the funding for new software should be budgeted for elsewhere. 


As the DSG Early Years Block was allocated on the basis of a January census and estimates had to be made on the hours of provision to be funded that were not captured in the census. It was proposed that £572,057 be retained as contingency for 3 and 4 year olds and £100,100 for 2 year olds provision.  In response to concerns, it was explained that any unspent contingency would be communicated at the various forums at the year end and that any underspend would be contained in early years. 


Due to increasing pressures on the High Needs Block, it was proposed that the contribution to the Inclusion Fund be reduced from £100,000 to £50,000 and that the contribution from the Early Years Block be increased from £100,000 to £150,000.  


Havering had only used deprivation as a supplementary factor to allocate funding to providers, other than through the basic rate.   It was estimated that £500,000 of funding would be allocated through the deprivation factor, well within the 10% permitted through supplements.


It was proposed that the basic hourly rate of £4.65 for 3 and 4 year olds and £5.40 for 2 year olds be applied for 2019-20.  It was estimated that 2 and 4 year olds would cost a total of £14,924,700 and £2,079,035 for 2 year olds.  In response to some points made in the consultation it was explained that the Local Authority were restricted by the central government settlement in the amount they could fund providers but had ensured that any increases that were affordable and directed through the base rate funding for the 2 year old and 3/4 year old entitlement. The Local Authority was supportive of all providers, and were in continuous dialogue with central government on funding pressures across all educational establishments in the Local Authority.  It was noted that early years providers would welcome any increase in the basic rate due to the difficulties in delivering quality provision on the current basic rate.


In response to questioning, it was explained that the majority of providers did not want to pay for special educational needs training but would prefer the training to be funded by the Inclusion Fund.  It was raised that some providers invested less than others in special educational needs and concern was raised regarding the negative impact that this had on primary schools and vulnerable children and the potential impact on secondary schools.


The Early Years Providers Reference Group would be meeting on the 13 February 2019 to discuss the consultation and it was agreed that their feedback would be considered at the next meeting of the Forum.




That the Schools Funding Forum agreed the proposals as follows:


i)                    To increase the basic hourly rate to providers to £4.65 (from £4.53) for 3 and 4 year olds.

ii)                  To continue to use Deprivation as the only supplement to the basic rate

iii)                To continue to set the hourly IDACI rates so they are in line with those used for the schools national funding formula.

iv)                To retain contingencies of £572,057 (from £803k) and £100,100 (from £85k) for 3 & 4 and 2 year olds respectively to fund in-year provision.

v)                  To retain £800k (5%) for LA statutory and quality assurance functions

vi)                To retain the Inclusion Fund at £200k but reduce the contribution from the DSG high needs block from £100k to £50k.

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