Memorandum submitted by the House Schools GroupExecutive summary
The DCSF's proposals to extend the arrangements whereby children under five have a minimum entitlement free of charge to early education funded by local authorities will deprive such children, if attending independent schools as opposed to nurseries, of the benefit of a subsidy that has been available since the introduction of the Nursery Education Grant in 1996. It is not clear whether this is the policy of the government or an unintended consequence of the DCSF's failure to understand the status quo. The DCSF should be urged to clarify its intentions. Otherwise, one effect of the proposed new régime will be to impose on central funds the burden of educating the children now attending independent schools - and very likely not just early years children but also children of compulsory school age whose parents would have paid fees for the entirety of their education in the independent sector.
Introduction
1. House
Schools Group (HSG) is the holding company for three proprietary independent
co-educational preparatory day schools in Factual information 2. For the first two terms at least, most of the three year olds attend school for mornings only, that is to say arriving at school during a period of 20 or 25 minutes and being collected at the end of the morning at 12noon or 12.15pm. But by the summer term the children in the nursery tend to remain all day, like the children in the reception classes, and their day therefore ends at either 3.00pm or 3.40pm. The details are
3. A child attending one of our schools attends day in and day out in term time, the three terms of the academic year having an aggregate duration of about 34 weeks. Thus the schools do not accept children for odd days or only certain days of the week, although children attending mornings only do have the option to remain for occasional afternoons as distinct from being "all day" children. 4. Each school's fees are set each year by HSG. For the current academic year 2009/10 the fee per term for mornings only attendance is £2,002 at BHS and OHS and £1,940 at PHS. For all day attendance the fee per term is £3,950 at BHS and OHS and £3,880 at PHS. 5. The
fees charged by HSG schools are considered to be comparable with the fees
charged by other independent schools in 6. For many years each HSG school has participated in the scheme run by the local authority for its area - each school is in a different borough - to support the education of early years children. Over the years the scheme has had changes in nomenclature (first, "Nursery Education Grant", then "Early Years Grant", then "Minimum Funding Entitlement" and currently the "Free Places Scheme"). The effect of the scheme, under whatever name, has been that the fees otherwise payable for a child aged three or four years on the headcount date set by the local authority for the term (1 September, 1 January and 1 April) has been reduced by a grant paid by the authority. The amount of the grant varies from one authority to another. For the current term, the grant receivable by BHS from the Royal Borough of Kensington & Chelsea is £488.00, by OHS from the London Borough of Ealing £451.55 and by PHS from the London Borough of Wandsworth £547.00. 7. Although, as is customary at all independent schools, the fees payable by the parents are due on the first day of term, local authorities pay the grant for the term in two instalments, the first usually shortly before the start of the term and the second about half way through the term. The school's invoice addressed to the parents and which is payable by them on the first day of term shows the fees set by HSG as mentioned in paragraph 4 above, the amount receivable from the local authority as mentioned in paragraph 6 above and the difference. Thus the difference is the net amount actually payable by the parents on the assumption that they meet any applicable conditions imposed by the local authority, notably the production of evidence of the child's age. 8. The effect of the arrangements described in paragraphs 4, 6 and 7 above is that the net sum payable by the parents of a child attending an HSG school this term is as follows:-
* Includes lunch at no extra charge 9. The Department for Children, Schools & Families (DCSF) conducted a consultation exercise, over the period 13 May to 8 July 2009, on revisions to its code of practice on the provision of so-called free early education entitlement. This may be seen at http://www.dcsf.gov.uk/consultations/index.cfm?action=conResults&consultationId=1634&external=no&menu=3. 10. The form of response provided by the DCSF for those wishing to participate in the consultation process included the following question relating to paragraphs 27-32 of the discussion document:- 3. Does the process for reaching a locally set entitlement properly balance the need to respond to parental demand (including the needs of those least likely at present to take up a full free entitlement) with the need to ensure delivery is practical and sustainable for early years providers?
11. The Independent Schools Council (ISC), a politically independent, not-for-profit organisation whose member schools include around 1,000 settings making early years provision, answered this question "No" and added the following comments:- The process is about how parents can take up their entitlement rather than determining the parental entitlement itself, which is currently described as 15 hours over 38 weeks.
The offer to parents must not make providers' business unsustainable. LAs must understand the different business needs of providers if they are to achieve the requirements on them of both sustainability and sufficiency. Unbalanced, unfair and restrictive funding models experienced across different parts of the country pose threats to business and to quality provision. One LA will fund the free place at £3.00 per hour and another at £7.85 per hour. At £3.00 per hour it is hard to see how the setting can afford to pay the minimum wage let alone pay the level 6 qualified staff working in their settings.
The DCSF must set out a fair and clear direction concerning the charging of additional fees to parents. The requirement that take up must be "free at the point of entry" must not lead to the misunderstanding that settings cannot make charges for additional hours, services and facilities.
In ISC independent schools, early years provision is often of exceptionally high quality (which can be verified from both Ofsted and ISI inspection reports). This is because providers are well-resourced and can invest in generous numbers of highly qualified staff from fees. This is why parents choose to send their children to such schools.
It is also important for funders to understand that whereas in maintained schools there are separate grants for capital expenditure (for example, for school development or maintaining the fabric of the building) in independent schools this has to be built into the fees. Applying this to the free entitlement, we presume that this means that maintained schools in receipt of the free entitlement will be able to use that entirely for the children.
By contrast, in order to maintain the current high standard of provision, independent and private providers may need additional funding beyond the LA per capita allowance. We are not suggesting that this needs to come from the state. Our view is that it is vital for independent schools to be allowed to have the scope to charge additional fees for additional services to parents, for which they are very willing to pay. Without this independent early years settings will not be financially viable in some areas and consequently up to 55,000 high quality funded places may cease to be available across the country.
ISC would welcome the opportunity to work with colleagues at the DCSF to establish an equitable model concerning charging for additional services that could be used nationally.
12. There was then a further question relating to paragraphs 27-32 of the discussion document, as follows: 4. Do the requirements for consultation with providers strike the right balance between the need to consult and our desire to limit bureaucracy in delivering the free entitlement? 13. To this question, the ISC answered "No" and added the following comments:- Meaningful and genuine consultation must take place with providers.
In many cases it can be very helpful and supportive and lead to good local provision through working in partnership. In other cases it can be bullying, over bureaucratic and constitute unfair business practice, for example when LAs deliberately pitch the level of funding at a level so that private and independent providers cannot generate funds to be used for maintenance, re-investment and development. We believe these costs are not borne by maintained settings from the per capita funding.
We are aware that some LAs are under the misapprehension that independent settings are all or typically "profit-making" whereas this is not the case. Such LAs intend to set low level funding for independent funders to avoid funding what they see as "profits" with public money.
We are aware that some LAs like to ask providers for provision costs rather than fee structures. This practice is overly bureaucratic and intrusive. The exclusion from funding provision of those who do not provide this information may be construed as limiting fair business and promoting the establishment of restrictive trade practices and local cartels.
The statement (para 30) that LAs may choose not to reach agreements with some providers if they cannot secure sufficient flexibility is very worrying. We have experience of extremely varied approaches LAs, and individuals within them, take to working with independent schools. In the worst possible cases LAs have designed and imposed their own criteria and if a setting cannot match what the LA has decided, and in the manner that they have decided, then it is very difficult for parents who choose independent settings to take up their free entitlement. This is despite adamant statements from DCSF that the entitlement is "free to all parents at the point of take up". There are also repeated reassurances from the DCSF that the EYFS is a flexible framework which respects the differing approaches taken by settings to meeting the needs of children, in keeping with each school's ethos.
Any criteria set down by LAs must be equitable for all providers, including PVI and maintained settings, and not advantage or disadvantage one particular kind of provider over the other.
We would welcome the opportunity to work with colleagues in the department on establishing fair and consistent guidance to LAs that would lead to equitable implementation across the whole country. This would guard against the perception that the first priority of some LAs is to use local agreements to secure provision within the maintained sector regardless of quality.
14. The DCSF's summary report on the consultation included as paragraph 8 the statement:- Although the discussion paper did not ask specific questions about funding arrangements for the free entitlement, this issue was raised in many of the responses. In particular private, voluntary and independent (PVI) providers raised concerns that their sustainability might be jeopardised on the basis that increased free hours will constrain their ability to charge for additional services.
15. The
DCSF then launched, on 7 October 2009, a consultation on a draft code of
practice on provision of the free entitlement for three and four year olds.
This consultation is current and will close on 8 January 2010. It may be seen
at http://www.dcsf.gov.uk/consultations/ 2.5 The free entitlement is a free, part-time place for each eligible child. Therefore, local authorities should ensure:
o No conditions of access / completely free at the point of delivery. Local authorities should ensure that providers which they fund to deliver the free entitlement do not impose on parents conditions of access to which they must agree in order to take-up their free hours, i.e., parents must not be required to purchase additional hours or pay lunch time charges in order to secure free provision. o No fees charged for free hours. Local authorities should also ensure that providers are not charging "top up" fees (the difference between what a provider would normally charge and the funding they receive from the local authority to deliver the free entitlement) in relation to any free hours and should take immediate action where this practice is identified. Local authorities should also ensure no other fees are being charged in relation to the free entitlement, for example for registration or uniform. If the practice continues local authorities may consider removing the provider from the Directory of Providers eligible to deliver the free entitlement and withdraw free entitlement funding. o Free standalone places. For any parent who wishes to access only 15 hours or fewer, the local authority should secure a free place which enables them to do so. LAs should communicate to parents that this may mean they can not access their entitlement at their provider of choice, or at the times they want. In these circumstances, local authorities should consider how they can broker local partnership arrangements to ensure that parents, wherever possible, are able to access their full 15 hours. o Recommendation 16. HSG's schools do not intend to modify the basis and terms on which they conduct their early years departments. We are therefore concerned that if the draft code of practice is given effect and the relevant local authorities apply literally the prohibitions described in paragraph 2.5 of the draft code, our schools will be obliged to withdraw from the scheme. So too, we believe, will all other independent schools like ours. Nowhere in the DCSF's consultation documents that we have seen is this expressed to be the government's intention. We are therefore uncertain whether the draft code is intended to bring about change clandestinely or would result in a consequence that is not in fact intended. 17. Some consequences of the proposed new régime would be: · Parents of children aged four in September 2010 and attending independent schools will be faced with an increase in fees of c.£500 per term (see paragraph 8 above) · Parents intending that their children should be admitted at age three or four to an independent school will have to decide whether they are prepared to forgo the benefit of the local authority's grant as part of an arrangement under which they secure for their child provision that they judge to be superior to that available at settings that are not part of an independent school. · Parents who would have been willing to put their early years children into an independent school with the benefit of the grant available for other early years children but not to do so without that benefit will probably enrol their children in a setting where the benefit of the grant is available. They will not however be able to obtain access to the additional educational provision available at an independent school. · Parents dissuaded by the absence of grant for early years children at an independent school to enrol their children aged three or four may decide to eschew independent education altogether. This would impose an additional burden on the exchequer. 18. We recommend that the committee urge the DCSF to clarify its intentions. December 2009
APPENDIX TO MEMORANDUM DATED 1 DECEMBER 2009 BY HOUSE SCHOOLS GROUP TO CHILDREN, SCHOOLS AND FAMILIES SELECT COMMITTEE EXTRACT FROM DRAFT CODE OF PRACTICE ON PROVISION OF THE FREE EARLY EDUCATION ENTITLEMENT FOR 3 & 4 YEAR OLDS
AS PUBLISHED BY THE DEPARTMENT FOR CHILDREN, SCHOOLS AND FAMILIES ON 7 OCTOBER 2009
Chapter 2: The Free Entitlement
Vision The free early education entitlement is designed to offer every 3 and 4 year old child, irrespective of background, access to two years of early learning and childcare provision before reaching compulsory school age. It is the Government's major early years investment in child outcomes. From September 2010, the offer increased to 570 hours a year (which equates to 15 hours a week) for 38 weeks of the year, to be delivered more flexibly to better meet families' needs. The extended flexible entitlement will continue to promote child outcomes but also allow parents additional provision and more flexible access, in order to support them to access employment and training options and contribute to the drive to reduce poverty.
To secure delivery:
Key principles
Local authorities should have regard to all of the following principles when planning and managing the delivery of the free entitlement.
· The needs and best interests of the child should be paramount · The free entitlement must be provided completely free at the point of delivery · Local authorities should deliver the free entitlement in a way that balances their priorities around sufficiency, quality and accessibility · The free entitlement should be delivered in a way that reflects, as much as possible, parental demand and gives parents choice about where and how they access their offer · Local authorities and providers should adopt an inclusive approach, promoting equality of opportunity, particularly to the most disadvantaged, looked-after children and children with a disability or special educational needs
Provision of the free entitlement The free entitlement
2.1 With effect from September 2010, the free entitlement is free early years provision for every eligible child, for 570 hours per year and during no fewer than 38 weeks in any year - for example, at least 15 hours per week over 38 weeks of the year. From September 2010 the free entitlement will also be delivered more flexibly, in accordance with parental demand - see Chapter 3.
Free Entitlement Regulations
2.2 The Local Authority (Duty to Secure Early Years Provision Free of Charge) Regulations 2008 ("The Free Entitlement Regulations"), together with section 7 of the Childcare Act 2006 under which they are made, govern the free entitlement. Free Entitlement Regulations, with effect from September 2010 [pending this consultation] change the amount of free provision that LAs must secure and further clarify that this can be delivered flexibly. The regulations increase to 570 hours per year the free provision that local authorities must secure that early years provision is available for each eligible child in their area. If available over 38 weeks of the year, this would equate to 15 hours per week. However, although this free provision must be available during at least 38 weeks of the year, the regulations also clarify that provision does not have to be available for 15 hours per week and can be stretched over more than 38 weeks, with fewer than 15 hours a week, to enable the entitlement to be delivered more flexibly. This supports the aim to ensure that local authorities can secure the availability of the free provision flexibly to meet parental demand.
Eligibility
2.3 Local authorities must ensure that children are able to access their free entitlement for up to two years before they reach compulsory school age. Compulsory school age is defined in Section 8 of the Education Act 1996 as the beginning of the term following a child's fifth birthday. In practice, local arrangements may mean children are admitted to full-time education before reaching compulsory school age. It may also mean that some 5 year olds will be accessing the free entitlement, usually at providers in the private, voluntary and independent sector as they will not have reached compulsory school age. However, for simplicity, this Code refers generally to "3 and 4 year olds".
A free place for every 3 and 4 year old
2.4 Local authorities are legally required to secure sufficient free early education place, as described above, for every eligible child.
2.5 The free entitlement is a free, part-time place for each eligible child. Therefore, local authorities should ensure:
o No conditions of access / completely free at the point of delivery. Local authorities should ensure that providers which they fund to deliver the free entitlement do not impose on parents conditions of access to which they must agree in order to take-up their free hours, i.e., parents must not be required to purchase additional hours or pay lunch time charges in order to secure free provision. o No fees charged for free hours. Local authorities should also ensure that providers are not charging "top up" fees (the difference between what a provider would normally charge and the funding they receive from the local authority to deliver the free entitlement) in relation to any free hours and should take immediate action where this practice is identified. Local authorities should also ensure no other fees are being charged in relation to the free entitlement, for example for registration or uniform. If the practice continues local authorities may consider removing the provider from the Directory of Providers eligible to deliver the free entitlement and withdraw free entitlement funding. o Free standalone places. For any parent who wishes to access only 15 hours or fewer, the local authority should secure a free place which enables them to do so. LAs should communicate to parents that this may mean they can not access their entitlement at their provider of choice, or at the times they want. In these circumstances, local authorities should consider how they can broker local partnership arrangements to ensure that parents, wherever possible, are able to access their full 15 hours.
2.6 Local authorities should consider setting out these terms, including their expectations on how providers will work together in partnership, in local Provider Agreements - see 2.12.
What a free place means for families
2.7 Local authorities should ensure parents are not subject to any conditions such as charges or a requirement to purchase additional provision, in order to access their free entitlement. From a parents' perspective, funding for the free entitlement enables their entitlement to be offered as a free place, which also means local authorities must ensure parents are not required to pay up-front and be refunded at a later date, and if they want to access only their free place, they will be able to do so.
2.8 Many parents choose to purchase additional hours at the same provider where they access their free entitlement. The rates which providers charge for their privately funded hours area matter for them to decide and may not be dictated by local authorities. However, in these instances they will be provided with a bill. Local authorities should support providers to ensure parents' bills are set out clearly so that parents can easily recognise and understand what hours they have accessed in relation to the free entitlement and how any fees relate to additional services or hours. Local authorities should also ensure that the free entitlement is not represented to parents as a monetary subsidy but as a free part-time place.
Providers not delivering the full entitlement
2.9 The Department recognises that some providers are not able to be open for 15 hours a week or the full 38 weeks a year so may not be able to offer the full minimum free entitlement (for example, Independent schools which are usually only open 34 weeks of the year, or a playgroup open only 12 hours a week due to shared premises). Local authorities should enable parents to choose a reduced entitlement at these providers if they wish and inform parents about the implications of doing so, in particular that, if the local authority has made the full entitlement available at a different provider, the local authority are not under any obligation to offer the rest of the child's free entitlement elsewhere in these circumstances. However, local authorities should seek to broker local partnerships to enable parents to access their full entitlement, wherever possible.
2.10 LAs should not fund providers to deliver fewer hours than the statutory 15 hours free entitlement without good reason (for example, limited premises or opening hours). Local authorities should ensure that providers who are receiving funding to deliver a reduced entitlement are not delivering additional hours of provision for which parents are being charged.
Delivery in Partnership
2.11 Key to successful delivery of the free entitlement is for local authorities to achieve a balance in their priorities; securing sufficiency, quality and accessibility in free provision. To achieve this, local authorities should actively work towards securing strong partnerships with providers. This will enable local authorities to strike the balance between securing sufficient high quality places, in accordance with local market capacity, and meeting parental demand for flexibility.
2.12 Local authorities should ensure that the partnership is based on negotiation and mutual agreement between local authorities and providers in all sectors. This partnership should be set out and agreed by all parties in a Provider Agreement, which local authorities should ensure are in place with all sectors delivering the free entitlement. These agreements should set out how providers will contribute to delivery of a local flexible offer, how they will drive quality and how the local authority will support this, and how they will work in partnership together. More detail on the use and content of Provider Agreements is set out at section 6.8.
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