Memorandum submitted by NASUWT


The submission by the NASUWT examines the key issues in relation to the introduction of the early years single funding formula (EYFSS). The Union's submission addresses the two specific issues of concern identified by the Select Committee:


1. the expected impact of new local funding formulae on providers of early years education and childcare services; and

2. the difficulties which have been encountered in drawing up new funding formulae, and how they are being overcome.


The NASUWT is the largest union representing teachers and headteachers in the UK, with over 270,000 serving teacher and school leader members.



Executive Summary

The NASUWT believes that a national framework for school funding is critical to ensuring equality of opportunity and entitlements for all children and young people, particularly in the early years.

The NASUWT supports the Government's commitment to extend the free entitlement to early years education and childcare for all three and four-year olds to 15 hours a week for 38 weeks a year by September 2010.

Young children develop best when their learning is led by qualified teachers working in early years settings. Research makes clear that children make the best progress in early years settings that have highly qualified and trained staff, and particularly in settings that have a high proportion of qualified teachers. This model of provision is established to a far greater extent in the maintained sector than in the majority of private, voluntary and independent (PVI) settings.

The NASUWT believes that the benefits of funding maintained sector provision and PVI provision through a common funding formula are highly questionable.

The Union sees no good reason for the Department for Children Schools and Families (DCSF) to be driving an increase in PVI provision into the system, when the maintained sector is able fully to respond to a demand for an increase in provision, given the necessary funding.

The NASUWT does not believe it is effective or appropriate to use taxpayers' money to fund profits for private and independent early years child care providers.

The application of a common early years funding formula to both the maintained sector and to PVI providers, which will inevitably move resources from the maintained sector to the PVI sector, undermines the ability of maintained sector providers to employ qualified teaching staff in the face of competition from PVI providers who do not generally provide education alongside their care provision in this way.

the NASUWT believes that it is right for the Government to set standards for early years provision across the maintained and PVI sector. The Union does not accept that it is the responsibility of national or local government to provide additional funding to private and independent providers to enable them to meet the standards.

The introduction of the changes in funding period 3, from 1 April 2010 to 1 April 2011 without transitional arrangements is likely to create funding turbulence and 'winners' and 'losers', and has the potential to impact adversely on staffing levels..

It is clear that where both PVI and the maintained sector are providing early years provision in a local authority, operating costs will vary between providers. The NASUWT believes that in these circumstances appropriate funding does not necessarily mean equal funding. In particular, where a provider incurs costs resulting from engaging qualified staff paid in line with national pay and conditions arrangements, their funding level must not be driven by the lower funding requirement of a provider operating with less well qualified staff, paid at levels below such national arrangements. PVI providers should find operational solutions to improving the quality of their provision without looking to the taxpayer to underpin those improvements.


Background and context


1. The NASUWT welcomes the opportunity to submit evidence to the House of Commons Children Schools and Families Select Committee Inquiry into the Early Years Single Funding Formula (EYSFF). The issues highlighted by the Select Committee Inquiry in its call for evidence are highly significant and require urgent attention.


2. A national framework for state school funding is critical to ensuring equality of opportunity, entitlements and access for all children and young people, particularly in the early years. High quality early years education depends critically upon funding sufficiency, fair and appropriate distribution, and on stability and sustainability. These are important tests which should be applied to the introduction of the EYSFF.


3. The NASUWT supports the Government's commitment to extend the free entitlement to early years education and childcare for all three and four-year olds to 15 hours a week for 38 weeks a year by September 2010. There is abundant empirical evidence which confirms that access to high quality early years education has a direct correlation with children's educational progress and achievement in later years.


4. Research undertaken by the Effective Provision of Pre-school Education (EPPE) Project[1] made clear that children make the best progress in early years settings that have highly qualified and trained staff, and particularly in settings that have a high proportion of qualified teachers. The NASUWT contends that maintained nursery schools, nursery classes attached to primary schools or local authority-managed Sure Start Children's Centres, where qualified teachers lead teaching and learning, provide the most effective models for the delivery of high quality early years education. This view is supported by Ofsted which, in 2009, judged 99% of maintained nursery school provision to be either good or outstanding. The NASUWT believes that there is a high probability that the quality of current provision will be jeopardised as a consequence of the introduction of the EYFSS.


5. The NASUWT recognises that there is variation in the level of maintained early years provision available across different local authority areas. It is also noted that many children have only been able to access early education through settings owned and managed by PVI providers. However, the NASUWT does not believe that this automatically means that this is either the provision which should continue or that it is a substitute for an appropriate network of local authority maintained provision.


6. There is evidence to show that the general levels of training, skills and working conditions of staff in PVI settings far lower than in the maintained sector. Very few PVI settings employ qualified teachers. These problems are compounded by the inadequate levels of qualified teacher input many PVI settings receive from local authorities. The combination of low pay, low skill and lack of qualified teacher input in the PVI sector means that children having their early education delivered in such settings are at a considerable disadvantage in comparison with their peers within the maintained sector.


7. The NASUWT believes that it would be unacceptable for the extension of the early education entitlement to be secured through the advancement of measures that undermine the current level or quality of early education provision in the maintained sector, or by PVI being seen as an appropriate alternative to maintained provision. Some local authorities have a distinguished track record of investing in early years provision and the Union is particularly concerned that an effect of the funding formulae would be to compromise this and penalise these Authorities in favour of the expansion of PVI provision, to the detriment of provision in the maintained sector.


8. It is regrettable that the policy to create a single funding formula has not been complemented by a policy to assure equalised standards for provision in the PVI sector at the level in the maintained sector. It is essential that work continues to raise quality standards in PVI settings to match those required in the maintained sector. This is essential to ensure that children with no option but to access their entitlement within the PVI sector have access to the same high quality levels of provision as their peers on roll in maintained settings. Moreover, this would help to provide greater confidence amongst all stakeholders that the EYFSS is not used to undermine or undercut provision in the maintained sector. This will require further work to be undertaken by the DCSF in developing more extensive and robust national standards on issues including staffing levels, the qualifications and skills of the workforce in the PVI sector and terms and conditions of employment that would bring greater equivalence between the standards of provision in the PVI and maintained sectors.


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


9. In its 2007 response to the Government's consultation on 'School, Early Years and 14-19 Funding', the NASUWT strongly cautioned against 'a participation-led funding model in favour of provision-based funding, since this could be highly destabilising to existing provision. The potential implications of a move to participation-led funding of maintained provision would inevitably have transitional implications which would need to be anticipated and tested carefully prior to widespread implementation.'

10. In making this response the Union sought to make clear that it preferred a move to provision-based funding from the funding of pupil places because such a move would provide the opportunity for:

local authorities to make a planned approach to transition;

the smoothing out of any funding turbulence generated by the change; and

additional resources to be allocated both locally and nationally to ensure a stable introduction of the new arrangements for both maintained and PVI providers.

11. It has become clear from feedback provided by headteacher and school leader members of the NASUWT that many local authorities have not been able to manage these changes in accordance with the principles above and without immediate or future detriment to maintained sector provision. The problems brought about by the move to the new funding methodology have been exacerbated by the national guidance and priorities.

12. The Government commitment to move to a position in which all early years provision is funded via local authorities using a single funding formula and to move to a position in which there is a more equitable balance of PVI and maintained sector provision is reflected in the adoption of a participation-led funding methodology which has hitherto guided funding decisions for the PVI childcare sector. NASUWT members tell us that their local authorities believe there is a danger that the change to participation-led funding will put at risk the future viability of maintained sector provision and lead to significant levels of financial uncertainty and turbulence within the sector.


13. When commissioning early years service provision from PVI providers, local authorities need to ensure that contractual arrangements on funding are agreed with PVI providers that reflect their fixed operating costs as a part of the overall costs of service provision being commissioned. It is often the case that it is not possible for a commissioning local authority to demand access to the relevant financial records of a PVI provider which refuses access to such information in the interest of commercial confidentiality.


14. It is clear that the policy to use the same funding methodology to fund PVI providers at the same levels as maintained providers and to drive into the system more PVI provision would inevitably put pressure on, and reduce, the scale of maintained provision. Of particular concern to the NASUWT is the requirement on local authorities to recognise in the funding allocation that PVI providers should be able to operate at a profit. It is completely incompatible with the principles which should govern the use of public money.

15. Proposals to introduce statutory regulations to enable maintained providers to levy financial charges for provision made beyond the 15 hour free entitlement have not been progressed. This places maintained providers at a further disadvantage compared to the PVI sector.

16. The timing of the introduction of the single funding formula during a period of recession is bringing additional consequences. Feedback from schools and local authorities also indicates that uncertainty about the future of the quantum for education funding coupled with an unstable economic context has driven more cautious decisions by a number of local authorities. This is exacerbating the potential for turbulence for those maintained providers which had formerly been able to provide places up to 25 hours per week per child now being limited with funding levels that restrict them to 15 hours per week.

17. Variations between the 150 local authority funding formulae are further compounded in the context of early years funding because of the variation between local authorities of the amount and nature of pre-statutory provision. There are significant differences in the balance of provision between maintained and PVI providers across local authorities. This creates a situation where there will be vastly variable impact of the changes from local authority to local authority. Local authorities need the ability to resolve the implementation of the changes by finding a bespoke solution. However, any local solution must be underpinned by minimising the turbulence to maintained provision.


18. There is also concern in respect of the nature of provision some PVI providers may be offering. All maintained provision is inspected by Ofsted as education provision, PVI providers can choose to remain below the threshold which triggers inspection. A proliferation of small providers will exacerbate the difficulties faced by local authorities seeking to ensure high quality institutional performance management arrangements.

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


19. Maintained providers are very concerned that they are facing reductions in their annual budgets, in some cases quite considerable reductions. It is inevitable that such reductions will generate staffing reductions. A reduction in staffing in the maintained sector will not necessarily be translated into commensurate job opportunities in the PVI sector. It is unacceptable that teachers who have worked effectively in the maintained sector could lose their jobs to secure the profitability of PVI providers.

20. In local authorities, particularly large metropolitan authorities, which have historically made for many years a major investment to provide full time service, the changes could lead to maintained providers not being able to offer parents the full time provision they have become accustomed to and lead to only the 15 hours free provision being made. There will be an obvious social and also potentially financial cost resulting from this for working parents. This runs counter to the intention behind the provision.

21. The NASUWT believes that the range and complexity of the problems being addressed by local authorities pursuing implementation of the early years single funding formula go far beyond those already encountered and identified during the course of the pilot.

22. The Union is further concerned that schools will come under pressure to sustain their early years maintained provision by diverting Dedicated School Grant (DSG) funding into early years provision. As a result, the ability of teachers and headteachers to provide high quality learning experiences for pupils at KS1 AND KS2 may be compromised.

23. The NASUWT believes that there has been an absence of effective consultation at local level with providers. Many schools appear to have been unaware of changes to their funding levels and have been given little or no opportunity to plan appropriately to take account of their changing financial position. Schools as a result are being forced to make short-term decisions which may have a deleterious impact on staffing and service provision.

24. The NASUWT believes that the following is required:

a. More time for local authorities to test their formulae;

b. A removal of the requirement to find a profit margin for private and independent providers;

c. More detailed consultation with schools and detailed analysis of impact;

d. A clear period of transition to the formula.

December 2009

[1] Sylva, K., Melhuish, E., Simmons, P., Siraj-Blatchford., I. and Taggart, P. (2004) The Effective Provision of Pre-School Education (EPPE) Project: Final Report. London: DfES