Memorandum submitted by Essex Early Years Development and Childcare partnership


An overview of the Single Funding Formula


A view was expressed that as the SFF will become part of the direct schools grant (DSG) therefore any future agreement of the formula may be weighted towards the maintained sector as there is disproportionate under representation of the PVI on key decision making bodies such as the schools forum.


The summary is heavily focused on the views and impact of the maintained sector with an understated regard for the PVI, particularly Childminders.


The transcript in part acknowledges that the funding is insufficient to meet the cost of delivery; this is a widely held view in Essex and is a major cause of concern to us in maintaining sufficiency of choice and flexibility.


The transcript also fails to pull all of the main strands of work together in order that the sector may be looked at a whole. In addition to the SFF, these include:

The 2 year old funding programme

An extension of the 12.5 to a 15 hour flexible offer

New qualification requirements e.g. level3 as a minimum, EYP's, Graduate Leaders. Remuneration of staff should directly be attributable to a commitment to training

The draft code of practice

The proposed September intake of 4 year olds into fulltime education in either maintained or PVI sector


The inequality highlighted by the calculation and distribution of funding by L.A's is an issue for us, especially as many larger businesses have provision in a number of areas. The guidelines and interpretation also varies considerably.


Recent annual increases in funding, whilst welcome, have not kept pace with the year on year increase to minimum wage. It is also an indictment that we are concerned that the ability to remunerate is linked at the minimum level spectrum. It is also a concern from an analysis of level 3 job adverts that average wages at this level are barely 1 above minimum wage. Evidence shows early years practioners are being paid less than the cleaning staff working in their settings.


The funding signals a commitment to minimum standards rather than aspiring to quality.


We strongly refute the claim on P18 that the SFF is managed within areas of the team with most capacity. The service structure of early years teams is tuned to be 'fit for purpose' and with the necessary skill sets and expertise to deliver on all areas of service. We would also say that capacity generally tends to be over-stretched; the comment is therefore very misleading.





We would wish to point out that it is only small number of maintained nursery classes that will significantly lose out on funding under the new formula. These are classes which have been over-funded for their levels of participation historically. The proposed hourly rate will increase on a per child basis in our authority.


We have acknowledged that the impact on nursery classes in schools will require highly sensitive management and support. One aspect of the SFF communication to schools with indicative guidelines has promised a programme of support including a two year transitional period to absorb the impact of the changes to funding.


In order to have complete flexibility to manage peaks and troughs in the market there remains a sound business case to be marginally over funded to be able to fill available places on demand.





We did encounter difficulties reaching an agreement on a methodology for quality, which ultimately had to be omitted in the first instance as a supplement after an extensive period of consultation with schools, PVI's and the schools forum.


There does not appear to be recognition that quality costs, and that quality should be universal - satisfactory in our opinion is not satisfactory. However there are unequal mechanisms to address quality. Greater capacity and resources are available to address issues in the maintained sector compared to the PVI. Quality is presumed in the maintained arena and therefore requires no incentive.


Quality is also most greatly evidenced by the level of qualifications and by building continuous professional development of staff. Therefore staff retention is key factor in measuring quality but the level of funding offers no levers that may increase pay or reward performance.


There is biased perspective on the EYFS 'Education' outcomes. We would like to have seen a much higher profile being given to early learning and early childhood development.


The assertion that a Childcare provider is like any other business (Chairman's comment p6) is disparaging. There are minimum standards and legislative requirements that have to be adhered to e.g. staffing ratios. These come at a cost which has to be met by the business. We consider that childcare providers operating at 'break even levels' are managing a successful business. Of more concern many owner/managers do not draw a salary and forego other benefits in preference to the children and other staffs. Many settings also rely on volunteers and/or fundraising to supplement funding under the free entitlement.


If a quality supplement were linked to qualifications, this would over time create a 'two tier' system as many sessional providers would potentially lose out as would a number of childminders.




No thought has been given to the administrative impact on managing a fully flexible offer. This will require greater 'back office' resources.


This will also impact on employment issues as occupancy will fluctuate more widely with a flexible offer, furthermore overall occupancy levels could fall as least popular time slots emerge. Full day care providers will still have to cover overheads regardless.


There are pressures in meeting the requirements of parents who only wish to access elements that are 'free entitlement funded'. This, almost without exception would render businesses unsustainable. The SFF is geared to reward flexibility, but business pressures actually force them to resist this to allow them to charge for additional hours and services.


We are sympathetic to businesses in these situations, especially as we are required to provide best advice in business support in looking at all options of sustainability.


Finally, our suggestion would be to decide what end result is being aimed for (quality, minimum qualification levels, flexibility, diversity, etc) and then calculate the funding required rather than trying to fit these aspirations into existing funding levels.


December 2009