Memorandum submitted by the Early Childhood Unit, National Children's Bureau

Single Funding Formula

Key Messages

Single funding formula is moving in the right direction to ensure transparent resource allocation based on local political decision making

But it is not able to create a level playing field as there are insufficient resources

The DCSF and Government Offices need to carefully monitor the impact of the formula and any unintended consequences

One key concern is that the models are based on hourly rates with the 12.5 hour entitlement. With the introduction of flexible 15 hour per week offer, the formula may lead to a significant reduction in the number of settings who continue to be financially viable.

What's working well

Transparency of funding decisions and role of Schools Forum is now much clearer

Greater understanding of real costs of providing the free early education entitlement

Very locally driven - responds to local needs and Children and Young People Plan priorities

In many authorities the consultation process has engaged providers in the process

The funding follows the child

The mandatory deprivation factoring is welcome in directing funds to where most needed

Potential of more effective use of resources by not funding empty places

Many authorities have worked very hard in grasping the SFF and in consultation

What's not working well

The SFF was a far more complex process than DCSF or local authorities had realised leading to a number of local authorities starting later than required and/or finding more resources were needed

PVI sector only has one place on Schools Forum and some have found it a 'lonely' place with Forum members having limited understanding of how early years works and the role of PVI

In some authorities the role of nursery schools in providing some of the highest quality provision (74% with Outstanding OFSTED outcomes) for some of the most disadvantaged children has not been sufficiently recognised and many are facing significant loses which may jeopardise narrowing the gap for the most vulnerable young children

Using weighting for quality factors is welcomed but can be more complex than originally thought - and possibly open to legal challenge unless very robust

DCSF should have planned for assessing the level of support required - pilots had extra funding and started before the introduction of the flexible 15 hour entitlement

Greater sharing of concerns by member organisations (e.g. NDNA, 4Children, PLA, NCMA) with local authorities may have been useful in improving understanding and collaboration

There is still lack of clarity around the extent to which the funding is sufficient to cover all costs and what will happen to the sustainability of those settings that are only just viable with accepting 12.5 hours of nursery education funding. With the introduction of the 15 hour entitlement, plus the impact of the recession, there are concerns about the viability of enough EYFS places to ensure universal entitlement for all 3 and 4 year olds


November 2009

Dwynwen Stepien
Director, Early Childhood Unit