Councils can switch early years funding between settings, new DfE guidance states
Fiona Simpson
Thursday, April 23, 2020
Local authorities are encouraged to switch funding for “free” childcare places between early years settings if it creates more places for key workers’ children, updated government guidance states.
The Department for Education said today that it would be updating official guidance to “set out how local authorities can use their free entitlement funding differently, redistributing it – in exceptional cases and in a clearly focussed and targeted way – in order to secure childcare for the children of critical workers and for vulnerable children, where their usual arrangements are no longer possible”.
Children’s Minister Vicky Ford said councils should ‘“use flexibility to redistribute entitlement funding in exceptional cases where other options have been exhausted, helping nurseries and other settings stay open and making sure enough childcare places are available.”
However, early years leaders have warned this could lead to further financial struggles for nurseries which have already closed.
DfE’s first school and early years attendance figures show just a quarter (26 per cent) of nurseries have remained open while 45 per cent reported to have closed. The status of a further 29 per cent is unknown.
Figures show that over the Easter break 65,000 children attended early years provision, the DfE estimates that 59,000 are children of critical workers and 6,000 are classed as vulnerable.
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The Early Years Alliance (EYA) has said it has already received a number of reports from providers whose local authorities are reducing the level of funding being given to settings which are temporarily closed, in order to offer additional funding support to those open to key workers’ families and vulnerable children.
Neil Leitch, chief executive of the EYA said: “While we of course recognise the desire of government and local authorities to do all they can to support providers to stay open for key worker families and vulnerable children, this should not be at the expense of providers who have closed, given that many have had no choice but to take the difficult decision to do so.
“While the government says that providers set to lose ‘free entitlement’ funding as a result of this change can now benefit more from the Coronavirus Job Retention Scheme (CJRS), this isn’t an even trade as support via the Job Retention Scheme only applies to a provider’s wage bill and is capped at 80 per cent.”
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA)said: “Local authorities in England recently reported to the NDNA that they had a £65m underspend and more than £25 million held in contingencies against the three- and four-year-old funding across in England. We need to see the government give local authorities clear instructions on how to use this money along with savings made from school closures in order to support the early years sector. This announcement amounts to simply moving money around in a rob Peter to pay Paul approach rather than addressing the underlying issue.”
The change in guidance comes just days after the sector was left reeling from a “shock” U-turn on furlong funding guidance for settings.
Fresh guidance detailing which childcare employees would be eligible for the CJRS was released at 6.30pm on Friday (17 April), less than 72-hours before claims applications for the scheme opened on Monday morning.
Coronavirus (Covid-19): financial support for education, early years and children’s social care says providers may only access CJRS funds “to cover up to the proportion of its paybill which could be considered to have been paid from that provider’s private income”. This means employers will be unable to claim for the percentage of income covered by government-funded “free” childcare places.
Despite backlash from the sector, the children’s minister today (22 April) denied the claims of a “childcare crisis” and hit back at claims the government had backtracked on the furlough guidance.
Speaking at a meeting of the Education Select Committee, she said: “There has never been a change in guidance. The treasury guidance makes it enormously clear [that organisations receiving public funding to pay staff should not be able furlough for them]. That is what we added to our guidance as extra clarification. I wish I could have got that clarification out faster.”
