In a letter to local authorities last month, children's minister Dawn Primarolo conveyed the ominous-sounding words: "the Early Years Single Funding Formula is drawing closer". The formula takes effect next April. It is intended to ensure that, through the Dedicated Schools Grant, money for free childcare for three- and four-year-olds is distributed fairly and transparently.
But the change is attracting great anxiety from settings run by the state and the private, voluntary and independent (PVI) sector alike.
Many council-run nurseries - or nursery schools - are concerned it will trigger huge budget cuts, threatening their very existence. Historically, they have benefited from a greater level of funding than the PVI settings, which has been based on the number of places on offer, or capacity, regardless of whether those places were taken. But under the new formula, money will be allocated on the basis of places actually taken. The government wants local authorities to use any money that might be left over on services for children in the most deprived areas. Local authorities are also encouraged to offer supplementary funding as a means of incentivising improvements in quality or flexibility.
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