Memorandum submitted by Candy Daffern, Headteacher and Head of Centre, Chichester Nursery School, Children and Family Centre

1. Executive Summary

1.1 In 2007 the government announced with detailed guidance in 2008 and 2009 the Single Funding Formula (SFF). It was designed to: increase provision for 3-4 year olds; raise quality; and spread public funds more widely. We know from our national involvement that the SFF has created difficulties for many local authorities. Sadly, West Sussex has particular problems because of its historically low provision of maintained nursery schools (MNS) and nursery classes and the high proportion of Private, Voluntary and Independent Childcare Providers (PVI).

1.2 In Dawn Primarolo's letter to the Director of Children's Services she states that "any school that offers good quality provision and is generally full (around 85-90%) should not see significant changes in funding". Chichester Nursery School, Children and Family Centre has had three consecutive 'Outstanding' Ofsted inspections (Nov 2005, July 2006, July 2009) and is predicted to be 86% full over the course of this year, and yet the city of Chichester's only outstanding pre-school provision will face devastating reductions.

1.3 Without significant intervention, the Labour Government, which has done so much to improve early years provision and practice will threaten the sustainability of the most successful sector, maintained nursery schools and classes.

1.4 Further investment in the direct delivery of early years childcare and education is needed to preserve the quality of provision in the maintained sector and raise quality amongst PVI settings.


2. Factual information

2.1 There was an attempt to carry out a cost analysis to use as a basis for setting the single funding formula. This was unsuccessful as PVI settings were reluctant to give information relating to costs, considering this commercially sensitive information. Maintained settings had no option NOT to provide information as it is sited with the local authority. The result of this analysis has meant that local authority officers, attempting to make the most cost efficient formula have trimmed the maintained sector to absolute basics and made a 'best guess' at the cost of the non-maintained sector. The latest formula sees the four maintained nursery schools in the local authority over 500,000 less off.


2.2 Meetings to establish a fair, equitable and transparent formula have been difficult and professionally uncomfortable, made more difficult with ambiguity in the guidance for implementation of the formula.

In West Sussex, the group were unable to agree a quality indicator as PVI settings refused to accept quality indicators recognised through national research (e.g. correlation between qualification and quality, evidence of self-review and continuous improvement). Inequities in Ofsted regimes, section 5 inspections being more rigorous, prevented comparisons of quality across sectors.

In West Sussex county officers tasked with drawing up the formula largely represent and support the non-maintained sector. None are qualified teachers or support schools. There is a clear bias or perceived bias against the maintained sector. Examples of evidence to support this perception of bias are:

o A lack of knowledge of the standards regarding ratios of teachers in maintained nursery schools. Until specific guidance in the national standards were brought to the attention of officers, nursery schools were advised to replace two of the three teachers with Early Years Professionals to make the budget feasible;

o There continues to be a reluctance to fund the additional 2.5 hours, statutory from September, at the cost set for Maintained Nursery Schools. The suggested method is to fund at MNS rates for 12.5 hours and 2.5 hours at non-maintained rates although the unavoidable costs which MNSs face will remain for the whole of the 15 hour free entitlement .

o There was a reluctance to fund a Deputy Headteacher although schools of similar sizes in West Sussex have a Deputy Headteacher.


2.3 Despite the claims of the DCSF, there is not enough money in the formula to adequately fund the early years through the Single Funding Formula sector. Evidence to support this includes:

West Sussex is unable to fund staffing to the recommended levels laid out in the Guidance for Implementation of the Single Funding Formula;

The proposed formula does not take into account the true costs of basic expenditure for the maintained sector. In effort to 'make the formula work' using the limited amount of funding available, the Local Authority budgeted for only the absolute minimum cutting costs wherever possible. With the inevitable reduction moving from planned-placed funding (assuming 100% occupancy) to participation-led funding the maintained sector run a real risk of not being able to pay basic costs such as heating, lighting, cleaning etc.

There is still an issue of PVIs charging top-up fees, or making parents agree to payment for an extra half hour of childcare a day, as condition of admission into the setting. This needs correcting.


2.4 The guidance includes as one of the principles that the formula must take account of 'the legitimate need for the PVI providers to generate some profit'. Although the profit may not be great, long established PVI settings would not be in business if they did not already make a profit. It is despicable that public money is being taken from the maintained sector, which supports the development of the most vulnerable children, and given to PVI settings in the interest of making (even more) profit.


2.5 Plans for the introduction of the Single Funding Formula were created when the economy was flourishing. It is believed that more revenue would be invested into the direct delivery of early years education and childcare. Now in times of more economic hardship, the new formula is not popular with any sector

Maintained settings are set to lose substantially, especially in Local Authorities with low proportions of maintained and high proportions of PVI settings;

PVI settings are disappointed not gaining the income they expected;

To make the formula work, the LA is forced to fund the formula on the presumption of 95% occupancy, which is unrealistic for any sector due to admission procedures. To reduce the rate to a more reasonable but still challenging rate of 85% occupancy, the LA would need 2 million more;

Local Authorities are reluctant to impose the formula recognising, at best, the reduction of quality of their maintained sector and, at worst , the real risk of closure of nursery schools and classes.


2.6 The new formula will have little impact on raising quality in the early years and childcare sector:

The reduction of funding to the maintained sector will lead to redundancies and loss of expertise within the sector which will be difficult to regain once lost;

In Local Authorities with a small proportion of maintained settings, PVI settings do not make significant gains in funding and therefore limited ability to raise quality. Maintained settings, however, will lose substantially and will be unable to maintain the same level of quality. For example, the nursery school I lead is predicted to lose 75,000 despite being over 85% full. This money shared amongst the 430 PVI settings in the Local Authority will give the average setting some 174. Conversely of course, offering greater protection to the maintained nursery school would cost the government relatively little.

The new formula has no stipulations to ensure an increase in quality in the PVI sector. (i.e. There is no obligation to increase the pay and conditions of staff, to invest in qualifications, to engage with the Local Authority to access support to raise quality. Some settings have no intention of doing any of the above with the new money they will receive.)


2.7 The new formula will reduce the capacity of the sector to support vulnerable children and families in the early years

In West Sussex, maintained settings were historically established in areas of deprivation. The inevitable reduction of staffing of these settings will reduce the capacity and impact on the settings ability to intervene early and narrow the gap between the most and least deprived.

Maintained sector have developed skills and qualifications to support children with SEN. The inevitable reduction in funding will lead to reduction in specialised staffing and the loss of expertise and capacity to support children with SEN.

The government guidance talks of protecting quality and raising standards across early years provision. It is odd the formula is driving West Sussex to be heading in the opposite direction.

Chichester Nursery School, Children and Family Centre serves the most deprived families in our relatively privileged city. We are sure you appreciate the benefits of high quality services which reduce problems and costs later.

Local Authority data shows that the nursery school makes a difference and adds value to a child's educational achievement now, and later in life. Children who have attended Chichester Nursery School consistently outperform those enrolled in other pre-school settings from the Chichester area in Foundation Stage Profile Assessments carried out in primary school, despite the nursery school's higher than average intake of children with Special Educational Needs. The provision which has done so much for vulnerable families will be unable to maintain this progress under the new funding formula.


3. Likely Outcomes

3.1 Nursery school budgets are being significantly reduced and this WILL RESULT IN CLOSURES of maintained settings. It is generally recognised that these settings provide outstanding early years provision and this will be lost.


3.2 Chichester Nursery School, Children and Family Centre will face in Dawn Primarolo's words "closure through strangulation".


3.3 Children's Centres built on maintained nursery schools will also be affected as budgets for the delivery of integrated provision are interdependent and cannot be easily separated. Making one element of the core offer vulnerable, threatens the sustainability of the whole provision.


3.4 Maintained provision WILL NOT BE SUSTAINABLE in the long term.


3.5 The reduction and minimalisation of the maintain sector will REDUCE THE CAPACITY TO SUPPORT VULNERABLE CHILDREN AND FAMILIES (e.g. families needing support, Looked After Children, children of teenage parents, children with complex special educational needs, children with disabilities, children with English as an Additional Language etc.)


3.6 There has been a PRESUMPTION AGAINST CLOSURE of nursery schools because it is recognised that, although without doubt expensive, it is excellent provision and therefore delivers VALUE FOR MONEY. The single funding formula challenges this presumption


4. Recommendations for action

4.1 Ideally, we would wish to see a halt called to the current work. However, we recognise that this is unlikely to happen. We would therefore suggest the following:

The deadline for implementing the single funding formula needs to be extended by at least a year to allow authorities to model and refine their formulae; this would then allow for submission and reworking to be carried out within a reasonable timescale and with full information and guidance available.

Local authorities should be required to involve officers that represent both the maintained sector and the non-maintained sector as well as providers from ALL early years sectors when reviewing the formula. This would remove any feelings of perceived bias of the Local Authority and improve the knowledge base of statutory regulations for both sectors.

It is essential that local authorities are given more direct and explicit guidance re the actual practicalities of arriving at a single funding formula; this would entail direct review and comment on each authority's formula with a potential for requesting a reworking of the formula.

More money must be invested into the direct delivery of early years and childcare services.

The Single Funding Formula must be linked with clear obligations to improve quality especially amongst PVI settings where quality is most variable. This should include a commitment to invest to improve pay and conditions of the early years workforce, a commitment to improve access to training and development, engagement with Local Authority representatives in the process of self-review and improvement.

Public money should not be removed from the maintained sector, well established as excellent provision, and re-directed to supply profit to private settings, whose track record in quality is more variable.


December 2009