Memorandum submitted by West Sussex County Council


We are pleased to contribute to the Inquiry. Paragraphs 1 and 2 below relate to the two questions posed by the Committee.


1.0 The expected impact of new local funding formulae on providers of early years education and childcare services



proposed : Base Rate plus Deprivation and London Fringe supplements.



1.1 November 2009 Local Authority (LA) Consultation results

The total number of responses received was 53 (11% of those affected). A main theme arising from the responses to the consultation questions by Maintained (M) and Private Voluntary and Independent childcare (PVI) sector are as follows:

Insufficient funding available for implementation of the SFF leading to a low base rate (M & PVI). This has raised concerns regarding:
- viability and long-term sustainability of provision/closure of MNS
(PVI & M)
- staff redundancies (M)
- loss of quality (M)

- inadequate level of support for children with SEN, disabilities and
additional needs (M)


1.2 In West Sussex 92% of children are supported by 430 PVI providers.

All PVI providers will receive minimum increase in funding of 7%. (3.58 increased to 3.88 per child per hour)

Those in areas of deprivation will receive further supplement, weighted by degree of deprivation. A 3 year rolling average has been proposed to smooth out impact of changes in areas deprivation 'scores'.

Those in areas of higher costs will receive a supplement towards London fringe costs.

The PVI providers will all receive an increase in funding and coupled with the Local Authority's new Quality Improvement approach, it is anticipated that the impact for the majority of children will be positive and gaps in outcomes reduced.


1.3 In West Sussex the maintained provision is provided by 4 Nursery Schools and 13 Nursery Classes

The 4 Maintained Nursery Schools (MNS) will receive reduced funding as a result of removing protected funding and moving to participation from planned places.

Of the 13 Nursery Classes 9 will receive reduced funding and 4 receive increased funding.

The impact is more significant for the Maintained Nursery Schools that have in the past benefited from guaranteed funding based on places (not participation)

Unless MNSs can attract greater numbers either of funded children (3 and 4 year olds) or other age range children (0 to 3s) it is anticipated that the MNSs will not be able to support the same number of staff. The Local Authority is planning to support the cost of such redeployment or, as a last resort, redundancies.

The Nursery schools and classes receiving most significant reductions will be encouraged to rationalise provision to better suit the demand for places, for example, reduce from three classes to two or two classes to one.


Through the new formula the maintained providers are being incentivised to increase participation, whilst continuing to provide effective leadership and management to sustain high quality provision.


2.0 Difficulties which have been encountered in drawing up new funding formulae, and how they are being overcome.

2.1 Establishing reliable cost information for PVI sector has been very difficult. Due to poor response to surveys, diversity of provision and lack of comparability in record keeping. We have used a Typical Cost Model that cannot suit all organisations.


2.2 National context has stated that there is sufficient funding in the system ie 'no new money' has set an inappropriate context particularly for a county that has very little maintained provision and large amounts of PVI. Schools Forum has agreed small increase of around 5%


2.3 Difficulty of gaining consensus around occupancy. This is an issue for MNS and nursery classes as the planned place mechanism funds them at maximum occupancy to comply with staffing ratios. Occupancy is not a factor in relation to the current funding mechanism for PVI but the PVI sector is critical of the new formula for assuming 95%. Reducing occupancy to 85% would cost 2m - but this is funding that they do not currently receive and is not affordable. To mitigate this the PVIs and MNS are encouraged to recruit more fully including children age 0 to 3. All MNS are Children Centres and are registered to deliver full day care for 0 to 5s.


2.4 Difficulty in gaining consensus around criteria for Quality and Flexibility supplements. These are still being considered and may be introduced in 2011/2012


2.5 Lack of clarity from DCSF regarding future funding streams (DSG, Standards Fund, SSEYCC grants) has made planning beyond 2011 and 'future-proofing' almost impossible.


2.6 Some suggested models should have been developed centrally and given to LAs to base consultation and development on. This has been attempted but timings have lagged against requirements of local schedules.


2.7 Early Years teams are relatively small and specialist. The Single Funding Formula has come at a time when the same teams are introducing:

Extension to 15 hours

Piloting of 2 year olds

Implementation of Early Years Foundation Stage (EYFS)

Roll out of Graduate Leader role

Delivery of Capital Grants scheme

Withdrawal of government sponsored iChiS database and implementation of new

Introduction of Parent Knowhow Directory (PKHD) systems and requirements


December 2009