The Early Years Single Funding Formula - Children, Schools and Families Committee Contents

Examination of Witnesses (Questions 64-103)



  Q64  Chairman: I welcome Lesley Adams, Jamie Lang and Lucy Connolly to our proceedings. It is nice to have such a good geographic spread on this particular subject because we want to learn how the single funding formula affects a whole range of activities up and down the country. You have not been chosen just because of geographic spread, but because you know a lot about this stuff, and we need to be educated. Lesley Adams, here we are looking at the single funding formula. The Government have been spending more money on early years than ever before in our country's history; they want a more transparent system that funds by take-up not place. Everything seems to be going in the direction of a sensible policy, but we have taken evidence that people are not happy out there in the real world of early years. What is the problem, Lesley? Can you tell us?

  Lesley Adams: I can have a go. As you say, a lot of funding has been put into the early years not just in Birmingham, but nationally in the last dozen years, and I do not want to play that down. Birmingham has a history of nursery education that goes back 60 or 70 years to the second world war. There is a basis there that possibly some of this stuff ignores. I have no difficulty with transparency. It is a really good idea but, as your Committee probably knows, our particular issue in Birmingham is not transparency, but the fact that we have 25 maintained nursery schools that we are very proud of, many of which provide full-time places. On the basis of funding participation rather than places, we need to do a whole lot more work to find a way to preserve those schools and, as things stand at the moment, that will be very difficult for us to do.

  Q65  Chairman: How long is a full-time place? How long does a child get?

  Lesley Adams: Five hours a day.

  Q66  Chairman: Why is that under threat?

  Lesley Adams: Because we are going to have to fund on participation rather than on place, which in itself is not a bad thing. I am not suggesting it is. It is a good principle. We will have to have a set of criteria for funding participation beyond part-time, based on deprivation factors. Again, that is also fine, but some of our nursery schools are not necessarily in the areas of the greatest deprivation in the city. Part of the effect of the funding formula will be that some of the funding will go to the private, voluntary and independent sector—the settings that are in the most deprived parts of the city. Again, I am not saying that is not right, but the impact of moving the money around means that the maintained nursery sector is threatened. As an officer working within our existing funding envelope, I have not been given extra money to fund the PVI sector—those in the deprived areas—and safety net the maintained nursery schools. I am in a bit of a cleft stick, so we in Birmingham are having what we consider to be a very generous safety net for two years. That will mean that the maintained nursery schools take a bit of a hit for a couple of years, but a lot smaller hit than they would have done if we had introduced this from day one. We have not had the time to do it, but we intend to work on a set of criteria whereby the most disadvantaged in the city get extra hours but, again, that will not necessarily mean that all of our nursery schools will not then take a hit if they are not admitting those most deprived children. Does that make sense?

  Q67  Chairman: It does make sense. Jamie, does that make sense to you or do you have a very different situation in your neck of the woods?

  Jamie Lang: We have a rather different situation in Sheffield. We only have three stand-alone maintained nursery schools. One of our problems is that we had understood, until July this year, that because we only had such a small number of maintained nursery schools, we would be allowed to continue to fund them on a places rather than actual numbers basis, at least for a transitional period. We were led to believe that by the document "Implementation of a single funding formula for early years: Interim guidance for local authorities", published by the DCSF in July 2008. If I can just read out one sentence, section 3.1 says, "Any exceptional use of place-led funding should be based on clearly defined local imperatives such as sufficiency and sustainability." Having received this document we attended a DCSF information session in Leeds—a half-day session—and we asked whether our interpretation was correct. DCSF officers present told us that while they could not guarantee that that would be the case, they thought it very likely that we would be able to continue to fund our three stand-alone maintained nursery schools on places rather than actual numbers, although they could not absolutely confirm it 100% at that point in time. When further guidance came out this year, it became clear that we would not be allowed to do that and we would be required to fund all forms of nursery provision on a pound per pupil hour basis—so actual attendance rates. When we modelled the financial implications of that for our three stand-alone nursery schools, we found that unless we did something about it and took countervailing action of some kind, they would lose significant amounts of money, up to a six-figure sum—just over £100,000 in one case.

  Q68  Chairman: Thank you. Lucy, what do you think?

  Lucy Connolly: My position is slightly different because Hertfordshire is a pilot local authority, so we are already working with the formula that has been devised. Hertfordshire is a very big authority with a lot of towns but a lot of rural issues. The consultation process that we would have been going through this time last year involved all the major stakeholders to make sure that we were as fair as we possibly could be, and get the funding level at an appropriate level so that we were not disadvantaging particular groups. Obviously my particular role is around quality. We have 800 providers of three and four-year-old funding and they are roughly split between half in the private and voluntary sector and half in nursery classes.

  Q69  Chairman: In the maintained sector?

  Lucy Connolly: Yes. And we also have 15 maintained nursery schools, so we have a lot of people providing it. Hertfordshire's model, after a huge amount of work, was to try to improve the funding for the PVIs and not disadvantage our nursery classes. Our nursery schools have been protected as best the authority can, very generously, to try and ensure that the quality continues by making good use of the supplements to support some of the costs that they have inherently got, because they have a head teacher, qualified teachers, etc. So the PVIs have been underfunded compared with the nursery schools and the nursery classes. We have raised the funding level for them, which will have an impact on the quality to come. On the whole, we feel that it has gone well for the majority of providers and that we have achieved the aim of a single funding system. But obviously Hertfordshire has committed to early years by supporting the early years settings through other funding streams to make sure that we did not disadvantage our schools and our nursery schools.

  Q70  Chairman: So your pilot is on course, you haven't got the problems that Lesley and Jamie have, and you are not closing down any of the maintained sector?

  Lucy Connolly: We're not closing down any of the maintained sector, but the maintained nursery schools feel under threat. At the moment, out of 15, we had 11 under the formula that didn't lose any money and we had four that did—not vast amounts of money, but they did lose money, and they are protected for a period of time.

  Q71  Chairman: What period of time?

  Lucy Connolly: The statutory qualifications they must have in a nursery class and a nursery school have been protected. Where we have nursery nurses in nursery schools, but in our PVIs they have people perhaps being slightly less well paid, we have protected those posts because they have been there for an awfully long time, and that is over a period of years.

  Q72  Mr Pelling: Can I start with Lucy, as we have just talked about the experience of a pilot programme. I appreciate that there is often a great benefit in being a pilot—you are under way—but in terms of change and quality of provision, has it been worth the effort?

  Lucy Connolly: We were working on it before the single formula came in, because we had a driver in Hertfordshire to improve the quality for children wherever they are. Obviously, that is my major job—not necessarily the dynamics of the formula. If a child goes to a PVI, we want them to have the best quality—equally, if they are in a nursery school or in a nursery class. We have been trying to narrow the gap between achievement in our PVI sector and our nursery classes in the maintained. We hope that the increase in funding for the PVI will mean that that will enable them to plan, for their own professional development, and us to reflect on what they need to do in a way that they have not been able to do in the past. Schools have naturally had a pot of money, and have been able to have in-service training and close the school for a day, and everybody gets trained. It has been much more difficult for the PVI sector, because there hasn't necessarily been the money to pay them. We are beginning to see that beginning to happen in the last two terms. We are being asked to come and do an INSET day for private and voluntary settings because they can afford to say to people, "We will pay you to come to it". That is going to have much more impact if you have all heard the same message around a particular thing. It is too soon to measure, but we hope that we will begin to get improved outcomes from our PVI sector. We are measured, at the end of foundation stage, on our narrowing the gap and on our threshold. That happens well before reception. You need to have the quality running through 0 to 5 and that is what we have tried to do in Hertfordshire: to look very early on—early intervention—and then make sure when they go into the PVI, it is a good quality nursery class or school, and into reception.

  Q73  Mr Pelling: My local authority has been a pilot. They report good news, but that a little like the initial introduction of local management of schools there is inflexibility in the formula. Would the Department's guidelines themselves show sufficient flexibility to deal with issues of diversity of need? I am sure Hertfordshire has its own share of social disadvantage. Is it flexible enough in that particular respect? A final, important additional question to this part of my questioning—what were the key problems? Could you say quickly what the problems were?

  Lucy Connolly: Working together has developed a professional respect for everybody who is working in 0 to 5, particularly with our PVI and our maintained. The key problem for Hertfordshire was supporting our nursery schools in a way that they did not feel that they were going to be marginalised. With lots of the supplements we have tried to make sure that, overall, there is much more funding being directed to early years in Hertfordshire, and we have tried to make a differentiation between sectors where appropriate. If you need a qualified teacher, which you do in a nursery class and in a nursery school, the funding is put in there to enable you to do that. Does that help?

  Q74  Mr Pelling: It does help, thank you very much. As was said in the introductory remarks, this has been a debate that has been going on for a very long time. I can remember that when I was chairman of education 20 years ago, there was a debate on top share between early years and other parts of the education service. Do the two other witnesses welcome the Government initiative on reforming early years funding? Was single formula funding the right way of addressing it?

  Jamie Lang: Yes, we welcome it in that sense. There is always a choice to be made between simplicity and transparency on the one hand, and fairness through more complex formulae on the other. In this case, the private providers, who we currently fund on a very simple pound per pupil hour basis, will find that they have a bit more flexibility in their funding and there will, for the first time from next year, be specifically identified formula elements—in our case for quality and deprivation. For the schools it is the other way round. They are used to a very complicated funding formula, which takes into account the fuel type that is used in the school, the length of the grass, almost—that sort of thing. Because they are moving to what for them is a more simple formula, it creates winners and losers. The benefit will be that they will be able to understand more easily why they have the amount of money they've got, but we have a responsibility as an authority, which I believe we can implement successfully, to protect the losers, to ensure that the losses are not of a scale that cannot be managed reasonably.

  Mr Pelling: Lesley?

  Lesley Adams: I welcome it, too. I remember the beginning of local management of schools and some of the anxiety of that time, and it is very similar. My only regret is probably that this sees the three and four-year-olds in isolation from the younger children and the older reception age children. I do not think you can just look at this age group. You've got to look at the linkages through the children's centres, through a pilot for two-year-olds—which we are lucky enough to have—and into the later foundation stage. Being a bit parochial, where you have small primary schools, you have to consider the impact on them of later year groups of this funding formula, and governors' willingness to manage things such as children's centres through their extended schools powers.

  Mr Pelling: I have always felt that the formula can be terribly restrictive. Indeed, I was disciplined by Angela Rumbold for refusing to introduce it in Croydon.

  Chairman: The imagination boggles at your being disciplined by Angela Rumbold.

  Q75  Mr Pelling: I know you're in a hurry so I won't do any more reminiscing. The Government's aims with the formula were greater flexibility for parents, improved choice and quality—that is an issue which we have already commented on. Do you think the formula can deliver on that?

  Jamie Lang: It can deliver. It just requires us to be flexible and creative in using the space that we are given within the formula regulations. For example, in the case of the problems around the stand-alone maintained nursery schools, in Sheffield, as soon as we had it confirmed that we would not, as we had originally thought, be allowed to continue to use funding on a place rather than an actual attendance basis, we consulted the DCSF. We have now instituted an additional formula factor for those schools, based around senior management costs being specific to that type of provider, which we believe largely sorts out their financial problems. I am an accountant, but I would like to make it clear that, despite whatever promise may have been made, I have been advised by our quality people on the learning and achievement service that these schools are seen as beacons of excellence and that they are to be maintained. I am confident that we will find ways to make the formula viable and they will be maintained.

  Chairman: We'll move on. Karen.

  Q76  Ms Buck: Can you help me understand a bit better the itemisation of the cost burden on nurseries, as between participation and places? What is that composed of?

  Jamie Lang: Yes. This financial year, 2009-10, our three nursery schools are allocated an approved number of places. It could be 36 or 52 places and they are allocated a rate per place. If it's £3,000 per place, the funding consists of one times the other. If those places are not filled, that funding is still guaranteed them.

  Q77  Ms Buck: I think you mentioned that in Sheffield there is up to a 30% reduction in the designated budget as a consequence of this shift. Is it fair to say that the majority or all of that shortfall is made up of unfilled places?

  Jamie Lang: No. In our case, out of the three schools, we believe with one of them that a significant part of the problem—about half the problem in financial terms—is accounted for by the fact that it is not full. It is only just over half full. But the other issue concerns small institutions with diseconomies of scale, such as high overheads for premises and senior management costs. Compared with the size of larger primary and secondary schools, they are in unit-cost terms more expensive to run. We propose to get round that by inserting a specific formula funding element for those schools to recognise that.

  Q78  Ms Buck: I understand that issue about overheads very well. Both my boroughs have a number of maintained nursery schools. I am still not sure how that relates back to the participation/places discrepancy. You have given us an example of a nursery in difficulties because of unfilled places but is that something that is replicated across other local authorities? You're shaking your head, Lesley.

  Lesley Adams: Our difficulty is not with unfilled places. As I said earlier, it is with the shift from full-time to participation-based funding, in which the national entitlement is to a part-time place. We haven't been a pilot, so I'm aware that in Birmingham we still have to do some work on how we might allocate full-time places to the most deprived children, and we will do that during the period of the safety net. I think the question was, "Is it going to work?" Yes, I think in some cases it will work, because some of those schools attract those children, and their money will be affected. Also, we have to do some work about incentivising quality because as yet we have not reached a consensus. So those two things give me heart that we will get to a point, but I would still repeat that the problem is going to be with those schools that don't take in children who attract extra money because they are not deprived enough, if you will. They will have to stop taking full-time children and take part-time children, which in itself might not be a difficulty, but it might be, and I think that for us there will be an impact on the PVI sector, which the sector hasn't yet understood.

  Q79  Ms Buck: To play devil's advocate, what you appear to be saying is that in order to increase the quality and possibly the hours of provision to children in deprived communities, some of which is being met through the voluntary sector, you would be reducing the provision in maintained nurseries serving less-deprived areas.

  Lesley Adams: We will be requiring schools to take in part-timers rather than full-timers, which effectively equates to a financial cut, unless they can fill up with more part-time children. They might be able to do that because our sufficiency assessment suggests that parents prefer the maintained sector, which could mean that they leave the PVI sector.

  Chairman: They'd leave the PVI sector?

  Lesley Adams: We are in the early stages of this. I am crystal ball gazing a little bit here, Chair, but our parents tell us that they prefer maintained provision. If, effectively, some of our maintained provision is going to take in part-time children, they will be taking in double the number they take in at the moment. Those children will come from somewhere, and they will come from the PVI sector. But I am speculating—we are so early into this and don't really know.

  Q80  Ms Buck: One of the two boroughs that my constituency covers is the royal borough of Kensington and Chelsea, and five of the maintained nurseries there are considered to be under threat as a result of the formula. This is, however, at least the second and possibly the third time that the local authority has attempted to close those nurseries. You may not be able to comment, but I wonder whether there is a little bit of a sense that some local authorities are using this as convenient cover for levelling down on expensive maintained nurseries, the money from which they would rather have put into the pot to ease their own financial burdens. That may not be true in your local authorities, but I just wonder if you could speculate on whether this may be the case elsewhere.

  Lesley Adams: I'm not sure I want to speculate, but I'd like to be very clear that that is not the case in Birmingham. We would like to hang on to our 25 nursery schools because they are like engines developing quality provision that others can learn from. We'd really like to hang on to them. The presumption against closure is sort of helpful, but I think it is in conflict with the rest of the advice in some ways.

  Chairman: Lucy, do you want to speculate?

  Lucy Connolly: Yes. I don't think that would be the case in Hertfordshire. Equally, 12 of our 15 nursery schools are lead agencies for the children's centre agenda and the other three are not, but they all do extended provision and so they are offering a lot more than just a two-and-half-hour—going to be three-hour—session. They have exemplary practice and are highly thought of, but what we have tried to do is ensure that we protect them and at the same time recognise that they are going to be more expensive to run. So how are we going to equate that across the board? That is where the debate goes, if you have 800 other providers. We want to make sure that we keep our nursery schools as exemplary practice, but we also need to fund our PVI sector to be exemplary practice as well, and enable it to have the opportunity to develop in the same way. They are never going to cost as much to run as a nursery school, because a lot of nursery schools have got big floor areas and need to have a head teacher—a statutory requirement—so it is about the differentiation of funding, I think, according to the sector.

  Jamie Lang: I have already said that there is no intention to close any of our three nursery schools. We welcome the opportunity that arises through the introduction of this new way of funding to perhaps use a little pressure for efficiencies that was not there previously.

  Q81  Chairman: In a city such as Sheffield, you have all your eggs in a PVI basket. Around 43% of PVIs say that they don't really want to take the paid-for children and that they can't make any money out of them. What if 43% of your PVIs said, "Tough, we don't want to provide for these kids any more"? What would you do?

  Jamie Lang: I don't think that situation is going to arise. The modelling that we have done shows that, on most of the options that we have looked at, all the PVIs would be small winners. I certainly have not heard in any of our briefings with PVI representatives that they would want to turn the funding down. Obviously, people would always like more money—they always ask for more money—but I think that the PVIs generally in Sheffield see this as a step in the right direction. We have been able to assure them that, while it is not a gold mine—we won't have huge additional amounts of money—it will be moving up rather than down.

  Chairman: We move on to Graham and unintended consequences.

  Q82  Mr Stuart: "Unintended consequences" is a great title. Is it possible to adhere to all the guidance issued by DCSF without increasing the share of funding that comes from the dedicated schools grant given to early years?

  Jamie Lang: Possibly not. As I understand it, it is not a statutory requirement at the moment to have a quality element in the formula, but we are strongly encouraged to do so. That money has to come from somewhere. We intend to put money into quality. That comes from within the dedicated schools grant.

  Q83  Mr Stuart: Is "quality" about the quality of the staff, their qualifications and so on?

  Jamie Lang: Yes, and there are options for what factors you would link the funding for quality to. In Sheffield, we propose to link it mainly to staffing qualifications. That money obviously has to come from somewhere. I have been involved in meetings this week with other council officers looking at the pressures on next year's budget and seeing how we match those to the amount of money available. Our intention to slightly increase the funding of early years is a tension that will not be fully worked out until we finally set the school and PVI budgets at the end of February to the beginning of March 2010. Perhaps this will be the last year of significant real-terms growth in the money for schools that comes to the council, and we believe that we should be able to manage it in 2010-11. We all know that from 2012 onwards, there may be increased pressures that will make further progress more difficult to achieve, but the one year, 2010-11, where we have actual figures shows that we will be further above inflation in real-terms growth in schools funding, so we hope to use some of that for marginal increases in early years funding right across the board.

  Q84  Mr Stuart: I wonder whether Lucy or Lesley want to comment on that. Do your authorities agree with the Government that increased funding and, if necessary, a greater sum of the reallocation of funding elsewhere in the education budget should go to early years, and that that offers the best return on investment in child welfare and education?

  Lesley Adams: I think you started off by wondering whether the current allocation of the DSG covered what the Government are asking us to do.

  Mr Stuart: It was more whether you would effectively be raiding. Will you need to reallocate and increase funds from the dedicated schools grant in order to deliver the DCSF guidelines? In other words, the additional funding that is going to LEAs is not in itself sufficient if you don't dip into the dedicated schools grant.

  Lesley Adams: I believe so. I am not a technical person like Jamie, so I can't put figures on it, but I believe we will. We have already been to the Schools Forum to say that that is our belief, so it is aware of the pressures that are on us.

  Q85  Mr Stuart: Sorry, but just to be absolutely clear, you believe it will be necessary to reallocate the funds, not that there are sufficient funds without that?

  Lesley Adams: They are not sufficient. There will be a need for more in order to do everything we are being asked to do and keep nursery schools open.

  Q86  Mr Stuart: Is that your view as well, Lucy?

  Lucy Connolly: Well as part of the pilot, the Schools Forum agreed to some additional funds so that we could pilot it and see what the needs were going to be in future years. We have not got a quality supplement in our formula at the moment. We are obviously going to need to re-examine that in 2011-12. It is quite a tricky one to decide whether you give more money to your good and outstanding settings or to those that are inadequate or satisfactory. We are still debating exactly how we would make judgements on quality. The Schools Forum agreed some money from the dedicated schools grant. Obviously there are representatives of all sectors in Hertfordshire on that. I lead early years. My passion is that if we get it right for the youngest children, it will be good for them when they get older. That is a personal take on it.

  Q87  Mr Stuart: That is why I was interested to know whether, without the single funding formula, local authorities would have any way of looking at allocating more funds to early years. Everyone accepts early intervention and certainly hopes that it is a good investment. Is that the attitude of the authorities overall?

  Lucy Connolly: I guess, being part of the pilot, we must have been up for looking at what the implications were. I was not privy to the decision to be part of the pilot. There is a commitment to early years in Hertfordshire.

  Q88  Mr Stuart: Along with quality, rurality is something that you are encouraged to invest in but not necessarily given any money to invest in. Are there any implications from the changes that will affect rural provision? As part of that I should be interested to hear whether you feel that you are able to offer similar access and quality of provision in rural areas as you are in urban areas.

  Lucy Connolly: Shall I start, as we have quite a few rural providers. We've left the decision on how we are going to fund our rural schools during the pilot because we wanted to work on what it was going to look like. They have been protected over the years through other schemes so that where villages have not got a nursery or have not got the private and voluntary we have funded them in school as a part-time place. We have continued with that this year. Over the next year we are going to look at a menu of solutions because it differs in every village. You could have a village that has a pre-school and then it has a maintained school. If the pre-school is being funded appropriately, that is no problem. If it's got no pre-school, it is just making sure that the families get the access to the places in the same way as you would do in the town. We have a lot of village schools, so we are unpicking that but with a view to protecting them to make sure that they will get just as good an opportunity if they live in one of our villages as if they lived in Hertford.

  Q89  Mr Stuart: So will they get the same, yes or no? Will you be able to unpick it and provide it? You are talking about the challenges. I cannot get from your answer whether you are going to deliver something that you would consider comparable.

  Lucy Connolly: Yes, we are. It's just going to be getting a menu of options for different villages. It might not be the same for each place. We have to look at how we do it and what the formula would be.

  Q90  Mr Stuart: With the DSG being raided for early years, what will the impact be, if you are capable of looking forward—I did not mean that to sound as rude as it did. It is difficult looking forward knowing that it is going to be a tougher financial regime. What are the impacts likely to be on primary and secondary schools as a result of taking the funding away?

  Jamie Lang: As I said earlier for one year—next year—we do not anticipate serious problems. We are trying to prioritise early years a bit more than the other sectors, but we believe that we will still be able to achieve growth for the primary and secondary sector, which will at least keep pace with inflation and also put in the additional funding for personalisation that has been allocated by the Government. After that, we are speculating and things look like they will be much more difficult. At the end of the day the size of the cake is limited. My guess at the moment would be that while the PVI and the early years sectors in general will benefit in 2010-11, further plans to push that for a longer bit further from year two onwards might be frozen by the general economic situation and funding level.

  Q91  Mr Stuart: Moving back to the early years sector itself, if one assumes, going ahead, that there will be a much tougher financial situation, and if you look at the single funding formula, isn't there a likelihood over time that full-time places will diminish more and more, and that we will have a universal part-time provision, and find it very difficult to fund full-time places? Is that a risk?

  Jamie Lang: In Sheffield, we don't fund full-time places anyway. When local management of schools was introduced, we stopped funding full-time places and moved purely to funding nursery units in our schools on the basis of part-time provision. It has not been an issue.

  Q92  Mr Stuart: Does that show a tension between universality and higher quality targeted at children's greatest need? Is there a risk that full-time quality provision where that is provided will be undermined, Lesley?

  Lesley Adams: Yes, I think that there is a very strong risk of that, maybe not in the short term as you say, but in the long term. There will be a loss of those engines of nursery schools.

  Chairman: That's very concerning, then.

  Lesley Adams: I think it's concerning for the country, not just for Birmingham.

  Chairman: I was thinking about the whole country.

  Lesley Adams: I am agreeing with you.

  Lucy Connolly: Historically, we fund a very small number of full-time places—only about 30—which remain protected under the pilot. So it would not have the same impact as it would on Birmingham, where there is a lot of funding.

  Q93  Chairman: Lucy, when you are talking about all your villages, where you want to make sure of those provisions for children, do you mean all children, or do you mean children who are from a deprived background?

  Lucy Connolly: I mean all children. We have 90 schools considered to be small schools, out of 400 in our villages, or 25%—although I might not be absolutely correct on the figures. They are in all sorts of different parts, and are run in different ways. We've got first schools and very small primary schools, which already have the challenges of mixed-age classes. At the moment, children in a village, who are in receipt of particular grants, will get funded just the same as those in an urban area.

  Q94  Chairman: I was at a seminar with Kathy Sylva, a professor from Oxford University, who has in the past advised the Committee. She was very concerned that one of the unintended consequences will be that more and more children will pitch up for a day—maybe 10 hours—or one bit on one day and one bit on another, with no systemic approach to early years education. She said that it is very bad for children. Is that one of the unintended consequences? Parents might have the flexibility, but what is convenient for a parent going to work for the day may not be right for a child. Kathy Sylva said that if you put a child in for a morning here and an afternoon there, that child would think that it was a new place each time, and would not get a systemic approach to early years stimulation. Is that one of the dangers of what is happening?

  Lesley Adams: I believe so. I am not sure it's an unintended consequence. From the guidance we have, it is quite clear that it is a possible consequence, intended so that parents can move their children about—two days with one provider and three days with another, in a variety of ways—to suit parental employment. That is laudable in some ways, but there are consequences for the child, which are what you have described. It is not good.

  Chairman: Lucy, what do you think?

  Lucy Connolly: We haven't come across it particularly widely at the moment, but if we are encouraging flexibility—if a parent wants to be flexible with where they put their child—the responsibility is going to be with the parent. I hope that our early years providers will support continuity and help them to understand that key attachments are critical to young children's development. That's what we are working on. Ultimately, I guess a parent could choose to send their child to a different place if they wanted to, but I would hope that we would have good relationships and would encourage them to think about what is best for their child.

  Chairman: Let's move to implementing the single formula.

  Q95  Mr Chaytor: Lesley, earlier you expressed concerns about the time scale for the implementation. Could I ask Jamie and Lucy about the situation in Sheffield and Hertfordshire. Do you think that the time scale was adequate? Could you have done with another year to do all the work?

  Jamie Lang: I think that the time scale is adequate. We fully expect to implement on 1 April 2010. I think that you can have too much time; another year might be a good idea to keep us bureaucrats in jobs and going to lots of meetings and things, I suppose, but there must come a point when you look at your models, take a decision and say, "We'll do it that way." I think that we have had time—getting on for two years—to do that, so it is adequate.

  Lucy Connolly: I would agree. We did not feel that it was rushed. We certainly did not get the impression from our stakeholders—the providers—that they were feeling rushed into it. We consulted widely, we had enough time to look at what our responses were and to ensure that we did the best that we could from them. We felt that we had enough time to implement it.

  Q96  Mr Chaytor: Was the whole process complicated by the simultaneous extension of the 12 and a half hour entitlement to 15 hours and would it have been easier and simpler for you had that been done a year earlier or later?

  Jamie Lang: We did the two and a half additional hours a year in advance because we were a pilot for that, so we got that under our belts first. As a general principle, when you get different factors coming together in a time line like that, it can be a problem. I can imagine that other authorities have problems. For example, we have a problem this year because we have to implement the new single funding formula at the same time as we have significant population growth in those age groups and that is causing us problems.

  Lesley Adams: I think that it's a great shame that the 15 hours' extension and the single formula have come at the same time, because they have for us. It's taken our eye off the 15 hours—it hasn't completely because we are running a pilot and are getting some good stuff out of it, but where we should have the time to talk to people about the different models of delivering 15 hours, which is quite exciting and challenging, we are spending all our energy being cross with each other about the single funding formula. Okay, maybe there are lots of things that we have done wrong in Birmingham, but I think that it is a great shame; they should have been separate.

  Q97  Mr Chaytor: I am interested in the different perceptions of the whole process, between Birmingham and Sheffield for example. Obviously, it is not simply an urban/rural dichotomy, because we have two major cities with completely different experiences. Could I ask about Birmingham. Did you have difficulties in getting the cost data from providers? Is the variability of cost or the reluctance of providers to submit costs part of your problem?

  Chairman: An interesting smile, Lesley.

  Lesley Adams: It's part of our history, yes. We have had some difficulties and I'm not sure to what extent they have been any different to anyone else's difficulties. We did a cost analysis twice—the first time using the DCSF template and the second time using one that we developed ourselves. The first time we got a 33% response, but the quality of the information was not terribly good, and the second time we got a 17% response, but the quality was better. We spent a lot of time doing that, which is, perhaps, why I am saying that we have not had enough time because we really would have liked the quality of that to be better.

  Q98  Mr Chaytor: But there is no consensus among providers now about the costing model?

  Lesley Adams: We haven't had any major feedback from the PVI sector about the ultimate outcome of that, but that is another issue that, perhaps, is peculiar to Birmingham. I do not know. We do not have very strong umbrella groups that we can work with. For example, the National Day Nurseries Association is not very strong in Birmingham, so we are always working with single providers or very willing volunteers who are trying to represent the whole PVI sector when really they can't. That has been a difficulty for us. If I might just go on a bit, I think that the outcomes from the pilots have been rather slow in coming. We think that we have been waiting for information from the pilots that has not come and it would have helped us. Some of the things that Lucy said today have been helpful but I did not know them till today.

  Q99  Mr Chaytor: Do I take it from the Birmingham and Hertfordshire perspective, given that you are ready to implement as of 1 April 2010, that there is a now a consensus among all providers about the costing model that you established? I am directing that to Jamie.

  Jamie Lang: Our experience in Sheffield on this part of the exercise has been very similar to yours in Birmingham. We too sent out the DCSF template initially and got a very poor response rate, despite having someone on the phones phoning up and trying to help them through it. We then sent out a second cost analysis form, greatly simplified, in the hope that that would work. Putting the two together, we only had about a 31% response rate and a lot of the forms were returned only partially completed or they did not add up, etc. Our conclusion was that the cost analysis had turned out to be a bit of a waste of time, unfortunately. The sample size was so small that it was not very meaningful and, within that small sample size, the range of costs being demonstrated were absolutely huge, so it did not enable us to say, "Looks like we should be funding at approximately x amount per pupil hour." But, on the other hand, our general communication to the PVI sector and the schools where we are aiming to improve the level of early years funding overall generally has ameliorated their concerns about the cost analysis exercise. I think that the concerns that the PVI sector had about the cost analysis exercise are more to do with the fact that they did not want to share what they saw as confidential information in many cases—commercial information—with us. We have eight independent schools with nurseries. None of those made a return. Then there are the child minders who work at home; none of those made a return—19 of them—which I think is probably to do with that.

  Q100  Chairman: Why don't they return?

  Jamie Lang: In the case of the schools, because they saw the data as being confidential and nothing to do with the council. In the case of the child minders, because they are just not used to dealing with financial data and forms in that way.

  Q101  Mr Chaytor: In Hertfordshire, is there a consensus on costing?

  Lucy Connolly: There is now, because we are part of the pilot, but actually it was very difficult to get information to make sense of when we were trying to establish the funding. It was easier to lock into existing practice, with perhaps unreasonably low costs that some were charging, while some seemed awfully high. So, we decided that we were not going to get a clear picture, and what we had to decide was the theoretical model of what we wanted to do and how we wanted to fund it.

  Q102  Annette Brooke: Just a very quick question, because I think it is an interesting example of local decision making that is throwing up variations across the country. I wondered whether, very quickly and very precisely, from each authority, you could tell me exactly how much money you are allocating for the deprivation factor—presumably that is per child per hour, but if you could just clarify that. I want to see the variation from the three authorities.

  Chairman: You're the finance manager, Jamie, we'll start with you.

  Jamie Lang: In our case it is 15p on top of the basic rate. This year, for example, PVIs are funded £3.51 per hour. We intend to inflate that to £3.62 next year, with the new system, which will then apply to schools as well. On top of that they will be able to get up to 15p additional money for deprivation factors and up to 20p for quality factors.

  Lucy Connolly: I have absolutely no idea, I'm afraid. I have no idea how much is in our formula for deprivation, but I shall find out and let you know.[1]

  Lesley Adams: We are currently still in our formal consultation—it finishes on Friday. It will be something between 44p and 61p an hour, but I shall not know for a while.[2]

  Annette Brooke: Thank you. I am just interested in the hue of the variations. Could I just place on the record—I have to do this at some point—a declaration of interest. I am president of the Campaign for Real Nursery Education, to which a number of head teachers of these stand-alone nursery schools belong.

  Q103  Chairman: I never thought of that. I think I am something to do with the National Day Nurseries Association, which is based in my constituency. Thank you for that, Annette. Come on, here's a big change—a really big change. You are from very different areas of the country. From your answers to our questions, I am getting the feeling that this is inconvenient and tough, but that you can manage it. I certainly get that from you, Lucy.

  Lucy Connolly: We think it's gone well. A huge amount of work was done by lots of people working in partnership, but we feel that it has enabled us to raise the funding levels for our PVI, which will mean that they will be able to strive to develop the quality further. We have done our best for the nursery schools and would love to be able to continue funding them at the level at which they were being funded. Some of them did lose, on pupil count more than anything else. We feel that we have an early years single funding formula. It has to be tweaked in 2010-11 because of the way we have funded our PVI sector. We want to change not the level, but how they have got the money, in line with the information that has come out from the DCSF. We have some tweaking to do, but on the whole the changes are minor.

  Chairman: Lesley, you don't seem to be so happy.

  Lesley Adams: Don't forget, we are not a pilot authority. Maybe the extra year that Hertfordshire has had was helpful. We can manage anything. As local authority officers, things get chucked at us every day, and we manage them. We will manage it, but I am not as confident as Lucy that the outcome will be universally okay. Maybe in a year's time I will be.

  Chairman: So if you had been given another year as a pilot—

  Lesley Adams: I would have liked to have had longer to have better, longer conversations with all of the sectors. I feel very rushed, but I know that I stand alone on that one.

  Jamie Lang: We feel as confident as we can be that it will be implemented successfully next year. There are still some tough negotiations to be had to ensure that no sector loses out unduly. Generally speaking, we believe it will go ahead and that it will be broadly welcomed.

  Chairman: You have given excellent information to the Committee. If you think of things that you should tell the Committee or you think we missed, please be in communication. You are invited to stay. You might find it very interesting to hear what the Minister will say any moment now, especially considering Lesley's most recent comments. If you wait for a while, you might find out something to your advantage. We will see what that might be.

1   See Ev 39. Back

2   See Ev 39. Back

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