Memorandum submitted by the Independent Schools Council
1. The Independent Schools Council is a politically independent, not-for-profit organisation whose member schools collectively educate more than 500,000 children in around 1280 schools. Around 1000 of these make provision for early years. We have been assisted in the preparation of this response by our member associations, particularly, IAPS and ISBA. IAPS is the Independent Association of Prep Schools, representing some 550 heads throughout the country. ISBA is the Independent Schools Bursars Association which represents the bursars of over 900 schools.
2. We have member schools in every local authority across the country. Our experience from working with our associations and member schools is that the early years single funding formula (EYSFF) is based on false assumptions and applied inconsistently across the country.
3. It has become apparent that it is increasingly difficult, and for some schools no longer viable, to offer funded places to parents. This situation is set to worsen when the proposals in the Consultation on the Draft Code of Practice of the Free Entitlement for 3 and 4 Year Olds are implemented. Sadly the indications are that many schools will have to withdraw from the free entitlement scheme if they are to remain as viable, not for profit, businesses. For some, this will mean that they cease to make early years provision altogether.
4. Central to the issue is the statutory status of the Early Years Foundation Stage (EYFS). There have been various childcare funding vouchers and entitlements for parents since around 1996. Those independently owned nurseries and other providers who wished to accept state funding started to opt in over a number of years. Gradually, however, more conditions have been attached to the funding. We do not say that this is wrong. When public money is involved, proportionate measures should be in place to ensure quality of provision. ISC schools make high quality provision and would not wish to see that compromised while parental demand remains.
5. In 2008, however, the Early Years Foundation Stage was imposed on all settings whether or not they took the funding. ISC has considerable objections to this which have been rehearsed elsewhere. Since then, ISC schools which did not hitherto accept the funding have come to consider that if they are legally bound by the curriculum, they should take the funding on offer to offset the costs. Clearly, no element of independence is now maintained through not accepting the funding. But we are now reaching the position that the funding is not adequate to keep the provision high quality and sustainable financially for reasons which will be explained below.
6. It has become evident that the EYSFF was built from the experience of certain 'pathfinder' local authorities; ISC and IAPS were not made aware of or invited to contribute to the revised proposed funding arrangements with the consequence that the independent schools' position was not adequately taken into account. Speaking to representatives from pathfinder authorities at DCSF consultation events, even they are uncertain that the levels of provision they achieved during the pathfinder phase can be sustained now they are required to "stretch" that provision even further.
7. It would appear that the EYSFF modeling did not take into account several important differentials between a maintained school's costs and those of an independent school. For example: there was no recognition that:
· independent schools cannot reclaim VAT,
· the valuation (which determines the cost of business rates) of local authority educational premises is governed by national agreement which does not extend to the independent sector,
· the width and scope of business insurance for independent schools is far greater (and therefore more expensive) than that of maintained schools,
· the administrative overheads are far greater for independent schools (preparation of fee invoices and collection and banking of fees, for example),
· the lack of access to e-Learning credits in the independent sector, and
· the lack of access to government e-commerce centrally negotiated nationally.
Essentially, the costs of an independent school are not the same as those of a maintained one.
8. We understand under the EYFSS there are certain criteria that enable local authorities to supplement the core level of funding to schools. One of these is the qualifications of teachers.
9. We are concerned at the mandatory requirement to complete a Children's Workforce Development Council (CWDC) form in which teachers of many years experience have been asked to provide copies of GCSE and 'O' level certificates as evidence of their qualifications despite the fact that they have full QTS status.
10. In addition, independent schools traditionally employ many fully qualified teachers in their nursery schools and hence they have a large salaries commitment. However it is apparent that the qualification supplement is not applied in a way which truly recognises this and varies between local authorities. This despite the fact that there are national teachers pay scales.
11. For example:
Taking into account staff:pupil ratios, pension and national insurance contributions, a teacher with five years experience will cost a school just over £39,000 per year. Thus the cost of employing the teacher for the 15 hours free tuition would be £3 per pupil per hour for all 52 weeks or some £2340pa. Typically the employment costs in an independent school amount to about 70% of the budget. Classroom teachers will make up about two thirds of this or around 50% of the total budget. Thus the other costs of each free hour (buildings, support staff, utilities etc.) will be roughly the same as the cost of the teacher making a total in excess of £4500 pa. It is thus evident that independent schools are already subsidising the EYFS pupils and that the increase of funded hours to 15 will mean that more and more schools will decide that this is a subsidy they cannot afford.
12. It has been the permitted custom and practice up until now that schools could charge parents for additional hours and services. The new arrangements detailed in the draft revised Code of Practice and the increase of funded hours from 12.5 to 15 hours mean that schools will no longer be able to do this. It was our understanding from pre-consultation meetings on the proposed Code of Practice held by the DCSF in the summer that schools would be able to 'offer' to their local authorities the number of hours and weeks that could contribute to the matrix of local provision put together by the local authority. Schools could contribute 12.5 hours for 34 weeks as they currently do as part of the local provision. Such an approach would mean that independent schools would be able to remain viable as not for profit businesses.
13. This approach is supported by the draft regulations. The Local Authority (Duty to secure Early Years Provision Free of Charge) (Amendment) Regulations 2010, stipulate that the duty on the local authorities is to secure that prescribed provision is available during no fewer than 38 weeks per year. This duty does not rest on individual settings.
14. However this is at odds with the draft Code of Practice which states that
· "Local authorities should not fund providers to deliver fewer hours than the statutory 15 hours free entitlement without good reasons (for example, limited premises or opening hours), see para 2.10;
· "Local authorities should not fund providers offering less than the minimum entitlement without good reason." See para 6.3, last line.
15. This point has been further emphasised in the latest round of consultation meetings between DCSF and representative bodies. If local authorities require schools through their provider agreements to offer 15 hours per week, as they are encouraged to do, in many cases this would not leave enough additional hours that can be charged for to make the business viable or sustainable.
16. This is highly relevant to ISC schools which typically open only around 34 weeks per year and work to sessions of 2 1/2 or 3 hours. It is expected to cause difficulties to independent schools in practice and put them under pressure from local authorities to alter term times. This is unlikely to be practicable when the early years provision is part of a larger school.
17. Settings are also to be encouraged to move away from their traditional sessional structures towards more flexible arrangements. While this would fit with the play-based style of the EYFS curriculum, it often does not sit easily with the practicalities of running a school, employing staff and staff's own family and other commitments.
18. It is also at odds with the stated aim of the EYFS to set a standard for provision rather than dictating the means. The framework was intended to be sufficiently flexible to be achieved in different ways in a variety of settings, thereby preserving parental choice as to type of provision. Some of our schools have already experienced adverse comment from their local authorities for their use of a measure of age-appropriate formal teaching during early years. This has been said by those authorities not to square with the statutory requirements of the play-based curriculum. Now these authorities will have the additional lever of the EYSFF to impose their view but parental choice will be limited if this is permitted.
19. It has also come to our notice that some local authorities are putting unrealistic criteria in their provider agreements, with threats that funding will be withdrawn if schools do not sign up for them. In one authority (Somerset) schools have been told that they have to offer 38 weeks a year, whereas it clearly states other parts of the draft Code of Practice state that independent schools can offer fewer weeks (which has been custom and practice throughout). See paragraph 6.3, first sentence. This is a tension within the Code which needs to be resolved.
20. It is also proposed in the draft Code of Practice that additional funding can be made available based on quality criteria to be decided by the use of EYQISP. This is a quality tool which comes out of the National Strategies and which requires independent schools to introduce an additional tier of bureaucracy over and above the statutory requirements of the EYFS framework. The ISC sees no need for this added layer of quality inspection in what is already a highly regulated area.
21. In summary, the experience of ISC schools is that:
· the EYSFF is based on false assumptions when addressing independent school funding: the cost of an independent school is not the same as those of a maintained school;
· the varied interpretation of the EYSFF by local authorities does not result in a fair or adequate hourly rate for them to remain as viable, not for profit businesses;
· The draft Code contains tensions which make it open to different interpretations;
· local authorities are imposing additional layers of bureaucracy on schools and classroom teachers as part of their provider agreements;
· the draft Code of Practice has been re-interpreted since the summer 2009 pre-consultations to take account only of local authority concerns and not those of providers.
22. In light of these unrealistic funding criteria and the avowed intention by one local authority (Manchester) that "they are not there to pay the profits of the PVI sector", a view point which fails to recognise the non-profit making status of most schools, ISC is recommending strongly to members that they review their business plans with a view to withdrawing from the funded free entitlement scheme. We are strongly of the view that the EYFS framework should not be statutory for independent schools; only those schools choosing to take funded children should be subject to requirements.
find attached a copy of the submission from the House Schools Group
24. Also attached is the ISC response to the 'Extending the Free Early Education Entitlement Discussion Document on a New Code of Practice', submitted in July 2009.
 Published separately by the Committee.