What does the Spending Review mean for Early Years?

Published:
26th November 2015
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The key points which have emerged from yesterday’s spending review so far look like this:

  • The average rate for 3 and 4 year olds will be £4.88. The small print is yet to be clarified, but this figure included the Early Years Pupil Premium, for disadvantaged children, which DfE say is worth 5p within this calculation. Whilst this sounds positive as a headline figure, it seems likely that this figure will be what is paid to local authorities, not what will actually be paid to providers. DfE have said that the average ‘uplift’ is more likely to be 30p an hour – really not so impressive. There is no detail about the money being index linked, so bearing in mind it doesn’t even come into action until September 2017, costs will have risen significantly by then. The NMW is due to reach £9 per hour by 2015 – how will the funding rate increase to match this?
  • The average rate for 2 year olds will be £5.39. Concerns are as for the 3 year old rate.
  • The rates for 2, 3 and 4 year olds are for PVIs, childminders, primary schools and maintained nurseries. It will be interesting to see what guidance is given to local authorities about whether rates should be uniform across sectors or whether maintained settings will continue to be paid a higher rate.
  • There will be a consultation in January around how local authorities pass on funding and contract with providers.
  • DfE will be introducing a national funding formula for early years, schools and high needs from 2017-18.
  • DfE will clarify what extras providers can charge for (e.g. food, extra activities) and will look at flexibilities, efficiencies and cutting red tape. This is very welcome as it causes considerable confusion for settings and parents alike.
  • The new 30 hour childcare offer is going to be restricted to single/both parents who work 16 hours per week and earn up to £100k each. When the policy was launched in the summer, it had been promoted as applying to anyone working from 8 hours, so this reduces the number of children who are eligible.
  • The new funding rates will not come in until September 2017.

As usual, the devil will be in the detail. The initial figures sound promising for early years, but until there is clarity on how local authorities will pass on the funding, we are not really much further on. I will be continuing to work with the National Day Nurseries Association to represent the concerns of PVI nurseries.

 

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ABOUT THE AUTHOR

Sarah Steel
Sarah Steel
Sarah Steel established The Old Station Nursery in 2002 and now has 6 nurseries in the Lincoln and Oxfordshire area. She is passionate about childcare and providing safe environments for children which make both them and their parents happy.

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