Agenda item

To agree the hourly rates for Early Years providers with effect from the Summer term 2015.  Appendix B refers

(i)  2 year olds

(ii) 3 & 4 year olds

Officers presented a proposal on the Early Years Single Funding Formula (EYSFF) this was the statutory mechanism for funding the free Early Education Entitlement (EEE) for 2, 3 and 4 year olds and applied to both Schools and the Private, Voluntary and Independent (PVI) sector including Child minders.

The EYSFF for 3 and 4 year olds currently included a Base Rate for 2, 3 and 4 year olds with Supplements for 3 and 4 year olds for Quality and Deprivation.

The Base Rate for 2 year olds for all settings was currently £6.00 per child, per hour. The current Base Rates for 3 and 4 year olds for Maintained Schools, Independent Schools, Academies and Free Schools were £4.03 per child, per hour. For Private and Voluntary settings and Child minders the Base Rate was £3.49 per child, per hour.

The current average England funding rate set by the Government for 2 year olds was £5.09 per child per hour. The borough had been able to maintain the funding rate settings of £6.00 per hour, as the Government funding received had been comparatively generous.

The report informed the Forum that whilst the funding rate had been less than £6.00, it had been based on the estimated number of qualifying children taking up the full entitlement for a full year and in addition Trajectory Funding had also been given to support the development of the entitlement.

However, from 2015/16, funding received by local authorities would be based on actual participation based on the DfE’s January 2015 Annual Census, bringing this in line with the funding received for the EEE for 3 and 4 year olds.

The report advised that the DfE had confirmed that the indicative England average funding rate for 2 year olds would remain at £5.09 for 2015/16. The indicative rate for Havering was £5.28. This rate was the same rate as for neighbouring authorities such as Barking and Dagenham, Newham, Redbridge, Waltham Forest and Thurrock.

Based on 570 hours of provision in a year this reduction would amount to a loss of £410 to a provider per child.  It was therefore proposed to move to the lower rate over 2 years with hourly rate of £5.64 in 2015-16.  This would be funded by earmarking £231,000 of the forecast underspend in Early Years DSG in 2014-15.

The representative of the Early Years PVI sector was of the view that the proposed reduction concerning as a report in November 2014 by the pre-school learning alliance indicated that £5.97 was the average hourly cost of providing quality childcare for a 2 year old. Moving away from this rate had the potential to impact on quality for the 2 year olds taking up the offer in Havering. However, data extracted from the National Day Nurseries Association’s Insight Report “February 2014” indicated that a rate of £5.28 was higher than the national mean of £4.77. She added that it was welcomed that Havering’s proposal  was to support providers in 2015 through a transition to the new rate.

The increase of 0.07p on the EEE 3-4 hourly rate whilst welcomed, was the first increase in a number of years. The National Day Nurseries Association’s February “insight” report highlighted that the national mean of EEE funding being provided by Local Authorities across the UK as £3.77 for the PV sector. The proposed hourly base rate from Havering therefore still fell short of the the national mean. The representative from the Early Years PVI considered this to be disappointing and suggested that the EEE funded rate needed to be reviewed in 2015 as the government was pushing the PV sector to recruit graduates and deliver quality practise.

The Forum unanimously agreed the following recommendations:

(i) Agreed the following Early Years Single Funding Base Rates for

     2015/16:

2 Year Olds - £5.28

Schools (including Maintained, Independent, Academies and Free Schools) - £4.10

Private and Voluntary Settings and Child minders - £3.56

(ii) Agreed that the Supplements for Quality and Deprivation should

remain at the current rates for 2015/16

(iii) Agreed a payment to settings of £205 per qualifying 2 year old child, based on the verified 2015 Spring Term Census

(iv)Note the introduction of an Early Years Pupil Premium for 3 and 4 year olds from April 2015