Letter to the Chairman from the Rt Hon
Dawn Primarolo MP, Minister of State for Children, Young People
and Families, Department for Children, Schools and Families
Following my recent appearance at the Children,
Schools and Families Committee on the Early Years Single Funding
Formula (EYSFF) I am writing to confirm that it is the Government's
intention to postpone the formal implementation date for the EYSFF
by one year until April 2011. I trust you have seen the Written
Ministerial Statement that my office sent to you last week which
was laid in Parliament on 10 December.
It has become increasingly evident that a number
of local authorities have been having significant difficulties
and challenges with the development of their EYSFF. Further to
this, I am also aware of the concerns from providers and parents
about the potential disruption an under-developed formula could
cause. The Department's recent risk assessment, which gave a snapshot
of local authorities' progress on their proposed formulae, highlighted
the variability of approach and gives further weight to allowing
LAs more time to ensure that they get this process right. I promised
to share with the Committee a short note that gives the high level
messages from our analysis which I have attached to this letter
(Annex A).[9]
My decision to allow Local Authorities to delay
should not detract from the hard work that I know has gone into
getting local formulae to this stage. That is why I want to give
those Local Authorities, that feel ready, the opportunity to continue
to work towards an April 2010 implementation date and become part
of a new tranche of pathfinders. My announcement is not intended
to halt the momentum of local authorities who are ready to implement
successfully—and my officials will be encouraging them to
join the pathfinder programme—but it will allow more time
for other local authorities to resolve some of the difficult issues
I know they are facing locally.
The Committee expressed concern about the impact
of the funding formula on the Dedicated Schools Grant (DSG) and
the possible impact on primary schools. As I said to the Committee,
the DSG is given to local authorities as a single block to fund
provision for 3-16 year olds. We do not separate out the money
for the free entitlement for three and four year olds, but leave
it to local decision-makers to distribute DSG to meet the needs
of children in their area. We know that some local authorities
have agreed with their schools forum that additional funding should
be made available from the Schools Budget to support delivery
of the EYSFF, and this is rightly a matter for them. As I said
to the Committee, we are increasing the level of DSG significantly
over this period—by on average 13.1% between 2008 and 2011—and
local authorities and schools forums are best placed to decide
how to distribute their increases locally.
The EYSFF remains an essential reform if we
are to ensure transparency, accuracy and improve the way local
authorities distribute early years funding to the benefit of more
children and families. I want to thank the Committee for giving
me the opportunity to represent the Government on this issue.
December 2009
EYSFF DATA COLLECTION NOVEMBER 2009
AIM
The Early Years Single Funding formula (EYSFF)
data collection exercise took place in November 2009 and was designed
to establish an indicative national picture of progress and the
different approaches local authorities (LAs) were taking to formula
design—with a view to exploring further the impact of different
models over time. The majority of LAs provided this information
as a work in progress, subject to consultation, and the analysis
below is therefore based on that and likely to change. A report
on the results of the EYSFF data collection was sent to Select
Committee members following the EYSFF Select Committee hearing[10]
and this is an updated version, following further analysis.
1. BASE RATES
In order to enable a high-level analysis of
the approach taken to the EYSFF, formulae were categorised according
to the following models:
Model
| Description |
| 1 | Single base rate for all providers
|
| 2 | Two base rates: settings with a graduate leader and settings without a graduate leader
|
| 3 | Multiple rates: sector-specific (eg maintained nursery schools, maintained nursery classes, PVI, childminders)
|
| 4 | Other: included base rates determined by size of provider, flexibility and quality
|
| |
The table below shows that the multiple-rate model is the
most common, with a significant number of LAs also opting for
a single base rate.
Analysis has shown significant differences in base rates
between LAs as the range varies from 0.18p to £8.35 per hour.
For all LAs who supplied base rate cost information, the median
per hour rate is £3.50. It is important to recognise that
seemingly low base rates may form part of a wider formula which
includes any number of supplements. Data given in this section
should not therefore be used to calculate an actual setting's
total budget.
| | Amount (£) spent per hour
| | | |
| | | |
|
No of
LAs
|
Mean |
Median
|
Max |
Min
|
Range |
First
quartile
|
Third
quartile | Inter-
quartile
range
|
| All LAs with a Base Rate | 106
| 3.64 | 3.50 | 8.35
| 0.18 | 8.17 | 3.15
| 3.88 | 0.73 |
| Model description | |
| | |
| | | |
|
| 1 rate: all providers | 37
| 3.14 | 3.30 | 5.64
| 0.18 | 5.46 | 3.15
| 3.59 | 0.44 |
| 2 rates: Graduate leader/non-graduate leader
| 3 | 3.02 | 3.14
| 4.14 | 1.86 | 2.28
| 2.39 | 3.28 | 0.89
|
| Multiple rates: provider-specific | 63
| 3.73 | 3.54 | 8.35
| 0.86 | 7.49 | 3.15
| 4.00 | 0.85 |
| Other | 13 | 3.83
| 3.50 | 7.60 | 0.25
| 7.35 | 3.29 | 4.15
| 0.86 |
| |
| | | |
| | | |
For most LAs the base rate makes up at least 80% of the total
budget, whilst in a number of LAs the base rate proportion is
nearer to half of the total budget. It is important to note again
that LAs may have built formulae that pay more to providers through
supplements (eg deprivation, quality, flexibility and others).
1.2 Base rates for maintained nursery schools
For those LAs which included a specific rate for maintained
nursery schools, the range of rates is £0.86 (an anomaly)
to £8.35. The average rate for a maintained nursery school
is £4.94.
LAs base rates for
Maintained Nursery
Schools
| |
| | Mean | 4.94
|
| Maximum | 8.35
|
| Minimum | 0.86
|
| Base rate (£) per hour | Range
| 7.49 |
| First quartile | 3.75
|
| Third quartile | 5.83
|
| Interquartile range |
2.08 |
| |
|
2. DEPRIVATION SUPPLEMENT
Local Authorities' deprivation supplements vary from £0.02-£3.07
per hour per child. The average (median) payment per child per
hour is £0.20. On average, the proportion of a LA's total
budget given to deprivation is 3%, however the range showed a
huge variability from 0.1% to 22.1%. For those authorities who
provided cost data, the table below shows the range of rates.
Number of Local
Authorities
|
65 |
| Mean | 0.30
|
| Median | 0.20
|
| Amount (£) | Minimum |
0.02 |
| per child | Maximum | 3.07
|
| per hour | First quartile |
0.10 |
| Third quartile | 0.35
|
| Interquartile range |
0.25 |
| |
|
2.1 Deprivation supplement as a proportion of the total
budget
The table below shows how the anticipated total budget for
the deprivation supplement as a proportion of the total early
years funding varies across local authorities.
2.2 Examples of deprivation factors
Deprivation was measured in a variety of ways, with the most
common being IDACI and IMD scores. Other deprivation factors included
Acorn categories, Free Schools Meals entitlement, targeted ethnic
groups, postcode of provider and weighted supplement based on
child's postcode.
3. QUALITY SUPPLEMENT
Whilst there were 123 LAs who returned data capture forms,
three LAs each made two returns, one with a quality supplement
and one without, so there were 126 quality supplement returns
altogether. Sixty one (48%) of the returns reported no quality
supplement. Of the 65 that did report a quality supplement, 40
(62%) did so on a per hour/per child basis. The remaining LAs
reported their supplement either per child, per setting, per week
or per annum. The range of quality supplement amounts is shown
below.
Number of Local
Authorities
|
40 |
| Mean | 0.43
|
| Median | 0.20
|
| Amount (£) | Minimum |
0.02 |
| per child | Maximum | 2.49
|
| per hour | First quartile |
0.10 |
| Third quartile | 0.51
|
| Interquartile range |
0.41 |
| |
|
3.1 Quality supplement as a proportion of the total budget
The chart below shows the percentage of the total funding
spent on the quality supplement across local authorities, for
those LAs who provided cost data.
3.2 Examples of quality factors
A significant number of local authorities were unable to
reach agreement over criteria for the quality supplement but have
indicated that they intend to introduce a quality supplement in
the future as part of the iterative process of developing their
EYSFF. A number of authorities also decided not to include a quality
supplement as they considered quality to be built into their system
to such a degree that an additional supplement was not necessary.
For those LAs who did include information on quality, a variety
of factors were used, including qualification levels of staff,
whether the setting was led by a qualified teacher/Early Years
Professional, Ofsted ratings, local quality RAG rating, amount
of training and professional development offered to staff and
Quality in Action accreditation.
4. FLEXIBILITY SUPPLEMENT
The table below shows that 30 LAs have considered including
a flexibility supplement within their EYSFF. Some LAs may have
built a flexibility payment into their base rate and others will
be using Standards Fund money to incentivise flexibility as part
of the extension of the free entitlement from 12.5 to 15 hours
per child.
The table below shows how the amount spent per child per
hour on flexibility varies across local authorities, for those
authorities that reported a budget figure for flexibility.
Number of Local
Authorities
|
30 |
| Mean | 0.25
|
| Median | 0.15
|
| Amount (£) | Minimum |
0.00 |
| per child | Maximum | 2.50
|
| per hour | First quartile |
0.07 |
| Third quartile | 0.30
|
| Interquartile range |
0.23 |
| |
|
4.1 Flexibility supplement as a proportion of the total
budget
The chart below illustrates how the proportion of the total
budget spent on flexibility varies across local authorities. Some
local authorities provided more than one return, and all of these
have been included:
4.2 Examples of flexibility factors
A significant number of local authorities were unable to
reach agreement on a flexibility factor, but indicated a commitment
to introduce this at a later date. Others have built flexibility
into their base rates so did not consider it necessary to include
an additional supplement. Some authorities also decided to wait
until after the implementation of the flexible extension to introduce
a flexibility supplement.
For those LAs who did include information on flexibility,
a variety of factors were used including session length, opening
hours, localised flexibility grading, offering stretched provision
or a variety of sessions and offering flexibility around both
standard and extended school days.
5. TRANSITIONAL ARRANGEMENTS
Of the 123 LAs that made a return 27 (22%) reported that
they had no transitional arrangements, that they are to be confirmed
or that they are not applicable. The104 LAs that provided information
on transitional arrangements were grouped according to the following
transitional models:
Model | Description
|
| 1 | No transitional arrangements
|
| 2 | Transitional arrangements in place for less than 3 years
|
| 3 | Transitional arrangements in place for 3 years or more
|
| 4 | Transitional arrangements will definitely be used, but details had not yet been decided
|
| |
The chart below shows the spread of transitional models across
those local authorities who included this information.
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