Implementing an Early Years Single Funding Formula: Practice Guidance

Funding formula guidance - sounds complicated. I do have a favourite sentence: "Local authorities should not have a starting position that assumes that everything is correctly balanced at present, but similarly should not start with the assumption that it is incorrectly balanced." But it's unfair to pluck that out of context - the new practice guidance on the Early Years Single Funding Formula is necessary, should address some of the problems in the current system and is easy to follow. And, importantly, it is based on what the government has learned from local authority pilots.

What are the problems? Some early years providers - in particular, those in the private, voluntary and independent (PVI) sector - suffered considerable financial loss through the government's free childcare offer because the money made available by the local authority didn't cover the costs of the childcare. With the offer of free childcare due to increase to 15 hours a week, it has become a matter of urgency for the government to give local authorities clear guidance on how to make the funding system as fair and transparent as possible, improve financial planning and ensure they continue to comply with their legal duty to secure sufficient childcare for working parents. The new spending round starts in 2011, so local authorities must have a formula in place that helps them to assess the impact that any funding changes could have on all early years providers in the area.