Memorandum submitted by Save Our Nurseries

1. Introduction:

1.1 Since 2006 The Save Our Nurseries Campaign has been actively asking for a halt to the Code of Practice (On The Provision of Free Nursery Education places for 3 and 4 year olds, 2004/2006) until a full and in depth 'Regulatory Impact Assessment' can be done. Our aim and commitment (Appendix 1) to all children is:

To strive as Early Years businesses in delivering provision, that is tailor-made to meet our customers' requirements, alongside Government policies.

We value - Quality; Flexibility; and Concern for Areas of Deprivation.

We strongly believe that part of this is ensuring that the maintained sector remains as much intact as the private, voluntary and independent (PVI) sector, building on the strong foundations that have been laid over the last 20 years. We see the sectors as partners and regret the impression often given by government policies that PVI educators, such as pre-schools, sessional groups, groups with a specialist ethos or institutions not offering whole day care are somehow incomplete.

We put forward several points for discussion:


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

Insufficient funds

2.1 The government's stated aim is to provide a 'free' early years' entitlement to all children aged 3 and 4 years. The Oxford dictionary defines the word 'free' in monetary terms as "without payment, costing nothing". In this respect, funds should be available to cover all relevant costs for all, maintained and PVIs - based upon what it costs each individual provision to run its business. When funds do not meet costs - elements of 'un-sustainability' kick in. If the aim is that 'parents should not have to pay for 15 hours per week' - then funding must be available to cover the costs in full. With base rates ranging from 2.85 to 4.40 per hour per child - how can this be achieved?

2.2 The maintained sector should not be asked to compromise what it has achieved in many Local Authorities (LAs) over the last 20 years, where raising standards and providing quality environments for children in areas of deprivation have been clearly an enhancement to the educational standards of many children. This should not be compromised because of attempts to impose a rigid funding framework.



2.3 Likewise it should be acknowledged that the majority of the PVI sector, in fact, are small businesses and operate as such in order to meet and maintain their own costs of living as well as those of the staff that they employ. This is not helped by the constantly changing regulatory framework and repeated government 'initiatives' that impose a disproportionate burden on small and voluntary providers.


No level playing field

2.4 How can a 'level playing field' be achieved/imposed when 'choice for parents' is at the heart? Choice means 'diversity' - differing factors that meet differing parental and children needs - this does not equal a level playing field. Differing factors will equal differing costs. Subsequently, what maybe an acceptable amount for one type of provision, will not be for another. To give examples, aspects such as location, building, community, philosophy, ethos and specialist equipment will regularly differ from provider to provider.

2.5 The Maintained Sector also highlights this as a clear example. In many LAs provision can be found in three areas:

As part of a Primary School - A Nursery Class;

A Nursery School - dedicated to Early Years;

A Children's Centre - offering education and care birth to 5.

As part of the Early Years Single Funded Formula (EYSFF) each of these provisions in the majority of the LAs will be receiving a differing base rate. Why? Because of the differing factors associated with the structure, building and management.

However, for the PVI sector - whether, for example, the building is part of a 'freehold' or 'leasehold' or a charitable organisation where additional funding is sought - the base rate is the same.

'One size does not and cannot fit all'. Indeed, if the diversity of every child is to be recognised in policy the same must be recognised in the diversity of provision.



2.6 The EYSFF is unsustainable for all. We use examples from the government's own backed research report (Extended Flexible Entitlement for 3 and 4 year olds: Pathfinder Evaluation, (EFEPE) February 2009) whose aims were based upon demand, deliver-ability and impact but NOT sustainability.

2.7 The research used 20 pathfinder LAs which was equivalent to approximately 195,000 childcare places. However, only 10 pathfinders (90,500 childcare places) were selected as part of the evaluation process. Of these only 46 providers (2300 childcare places) or 1.15% of the total pathfinders was actually used for the final evaluation of the results.

2.8 This report (EFEPE), although provides no 'real' data in respect of funding and sustainability, does highlight the fact that the majority of the pathfinder LAs used 'uplift' in funding (either through enhanced hourly rates, enhanced rates plus one off amounts; or access to further grants) to achieve their results. There was also no clear evidence of the type of providers who participated - but appears to show a heavy bias towards the full day care providers open until 6pm. There is little acknowledgement of sessional provision and their different difficulties and findings.

2.9 Other financial data from the report highlighted a 68% increase in staffing costs associated with ensuring the implementation of the pilot. The report further states:

"...reflects concern across several areas that current funding rates do not reflect the true costs of delivery, when faced with increasing costs over which they have little control" (p57; 79); that

" size does not fit all"; and that

Factors relating to choice of provision by parents showed reputation as the most important. Flexibility and choice were NOT seen as an important feature for parents when choosing the right provision for their child (p46-64; 74-79).

2.10 In contrast The Federation of Small Businesses (FSB) survey (February 2009) received responses from 274 providers (30% of the FSB membership) and equivalent to 13700 childcare places, far exceeding the data for the government research. 9 out of the 100 counties that responded were pathfinders and of which 5 counties took part in the overall case studies. Questions asked by the FSB included:

Q. Does the current level of funding provided by your LA cover your hourly rate?

Yes: 15.4%

No: 84.6%



Q. How will extending the hours affect your business?

Positively: 13.2%

Negatively: 58.2%

No Change: 15.4%

Not Sure: 13.2%


Both PVIs and Maintained sectors have huge concerns

2.11 Evidence is emerging that both the PVI's and the Maintained sectors have huge concerns. In particular the fact that the EYSFF could/will create a 2 tier system, with many PVI's opting out of the funding scheme altogether because of the threats to their viability by what are, in effect, old-fashioned 1960s-style price controls emerging from the EYSFF. So far from enhancing inclusiveness, it will increase division in a sector traditionally open to all children. Alternatively, many PVI's have indicated that they will be forced to close down rather than risk slow death or compromise their belief in quality. This would reduce overall provision, damaging the government's aspirations for universal provision and add a deadweight cost to public sector provision. The FSB survey asked:

Q. Have you considered closing down your business in the last year?

Yes: 41.5%

No. 58.5%


Standards/quality will be compromised and will drop to the detriment of the child

2.12 Continued evidence that we have shows that LA's, in interpreting the EYSFF guidelines have become too prescriptive and demanding of the PVI sector, who in real terms, are individual, small businesses. Standards and quality will be compromised. We quote from correspondence between one LA and a local provider:

"Put simplistically the DCSF is wanting all children to have a minimum experience and are funding at this rate. This is lower than you are providing. The DCSF also want parents to have a choice about venues, times etc and are encouraging LA's to promote this. The two extreme options seem to be for you: 1. Do your own thing, provide what you want, when you want and fully charge the parents for what they are given ("Opt out" - our words and interpretation); 2. Trim down the provision to match more closely the funding that is available ("downgrade the quality" - our words and interpretation)"

There is no incentive to continue and the complicated process and uncertainty only continue to promote a low morale.


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

3.1 Currently we have had access to approximately 15 (10%) of the various consultation documents that have been filed by the LAs. Our initial findings are presented in Table 1 (3.4) and show that:

Workings are too complicated

There are cost mplications in implementing and administering

Variables are and will cause problems (one size does not fit all)

All LAs doing different things - this means there will NOT be a 'level playing field' between LAs and could be very difficult for providers on or near LA boundaries

There is a diverse market

The enforcement of a EYSFF on PVIs when they are private businesses for non compulsory education


3.2 We ask in light of these findings: What information is available which will inform public policy-makers [us] of what bureaucratic costs have been incurred in the administrative system, at national and local level, to set this process up within each LA?

3.3 We further question: What administrative costs are going to be taken out of the main budget for front-line education to enable the on-going administration of such a formula?


3.4 Table 1: Sample Local Authority Comparision based on consultation documents to take effect from April 2010:


Local Authority

Base-Rate (PVI)

Base-Rate (Child-minder)

Base-Rate (Maintained)

Information on how this was achieved.

West Sussex



Approximately 1.57 more than PVI sector.

Amounts quoted for Good provisions.




3.44 (2010-11)




Kensington and Chelsea




Consultation asks should this be across the sector? It has been based upon 'Pupil Numbers'. Additional funding factors will include Social Deprivation and Additional Needs.







Maintained (NS) - 70,000 to pay the headteache Av.

Rate 4.03 & max (if score for flexibility and quality - 4.37r.











3.73 (NS)

3.13 (PS)






No separate amount quoted.

5.79 (NS)

4.84 (PS)

Amounts quoted for Good provisions.


See note in comments


No record

Varying amounts across the PVI sector are being proposed:

3.82 for sessional/Pre-schools

3.90 for Independent providers and Full Day Cares.



Key: NS - Nursery School;

PS - Nursery Class in a Primary School



4.1 In conclusion, we have grave doubts about whether the difficulties of achieving a single funding formula can be overcome without disproportionate cost and damage to both access and sustainability. In any event, if Ministers feel politically committed to public statements as to 'free education' made before any detailed consultation as to how it might be provided and financed (not, in our submission, a good way to make public policy), it is essential to give more time to explore the emerging evidence of problems. We therefore respectfully submit that the Committee might recommend a delay in application of the formula to avoid consequences that were surely unintended by a Government whose commitment to the nursery education ideal we recognise.

4.2 We believe the imposition of the EYSFF will disproportionately hit specialist PVI providers, such as those as mentioned in the first paragraph (1.1) of this report, and those settings which cannot (e.g., by reason of the terms of their rent, or the part-time nature of their staff's preferred employment choices) offer full-time provision. That would be to the detriment of choice for the children who are the focus of all our commitment.

4.3 The effective 'privatisation' of schools, by forcing them out of the current mixed economy, would benefit no-one. The enforced closure of PVI schools would cost employment opportunities to many of the dedicated women who provide loving care to nursery children up and down the country. We cannot believe that such a consequence should be intended or envisaged in the name of imposing a single bureaucratic formula.

December 2009


Appendix 1:

Aim of the SON Campaign.

To strive as Early Years businesses in delivering provision, that is tailor-made to meet our customers' requirements, and alongside Government policies.

Value Statements

1. Quality of provision


We support the Government policy of 'Quality Provision' for all children. We acknowledge and embrace that quality goes beyond paper qualifications of staff, by recognising the importance of experience, dedication and natural aptitude, as well as all levels of continued professional development. These attributes should work together with a carefully prepared enabling environment to meet the needs of each unique child.


2. Flexibility


We support the Government vision of a best start for all children and choice for parents through flexible quality provision. By ensuring that the individuality, ethos and vision of each provision are maintained, the choice for parents in each community will remain varied and diverse. We strive to meet the needs of parents and children whilst ensuring that provisions remain independent and sustainable.

3. Deprivation


We are committed to supporting the Government vision in lifting all children out of deprivation, through sustainable high quality care and education. In addition, each provider will continue identifying and supporting those children and families in our own communities. Our support at times, goes beyond financial consideration, whilst always keeping the child at the heart of our objectives.