Agenda item

Nursery Education Funding Proposal


AD referred to her paper and highlighted that the national rate was increased for the first time in April 2020 by only 1.8%. This is a concern as the costs have increased since 2017 and they have had to be supplemented. In the intervening 3 years providers have seen costs of utilities, wages, food and business rates hugely increase, they have also had to provide workplace pensions. Providers, including childminders, nurseries and preschools, supplement the NEF with parental fees for extra hours, as they are unable to charge parents top-up fees other than for items such as food for any of their funded hours.


Between 23rd March 2020 and 31st May 2020 due to the Covid 19 lockdown the early year providers were only offering places to children of critical workers and vulnerable children. Therefore, their income from parental fees reduced dramatically. The DFE assured Southampton LA that the NEF for 2020-2021 would continue to be paid as expected, however the NEF have had to make exceptional payments to providers who remained open. Although only half the providers remained open.


Since 1st June 2020 the DFE have given the LA the ability to redistribute funding to ensure sufficient places. The NEF are funding providers who are offering a service regardless of their attendance although they are not generally funding settings that have remained closed. With an aim to redistribute funding and ensure that children are not doubly funded. 


There is a concern what the early year’s settings lose a high proportion of their children due to starting school and they rely on the autumn term starts. Due to the impact of Covid 19 not all parents may register their children.  NEF propose they are funded for the same number of children as last autumn term with an uplift to recognise the increase in funding rates. This has no financial implications for the LA.


Over the last 3 months child minders have resigned and three settings will close this term. Providers are struggling to remain financially viable. Nationally it is anticipated that between 20% and 25% of settings will close, this impacts on the economy and the life chances of the children.


ATJ questioned if there was mileage in costing in 2 year olds, who are not classed as vulnerable unless they are open to social care or have additional needs. The government stated that the fixed funding rate for 2 year olds has gone up slightly. The concern is that the number of eligible 2 year olds will increase as their parents situation gets worse.


JD acknowledged that it is a desperate situation and had no idea of difficulties in the free school sector and the knock on effect. JD advised that he had also received an email regarding early years and would forward it on to the Schools Forum and asked that the email was read as it is very powerful.


ATJ asked if there might be a working group going forward as years of research shows that early intervention helps. The DFE stated that 95% was to be passed to providers so there is little else that can be done. This is a national issue rather than a local issue. When Southampton LA saw the funding go down 3 years ago it impacted on the early years.


JD thanked AD for her report and hoped they would find a way to thrive.


ACTION: JD to forward Anne Wright, Paint Pot’s Nursery email to Schools Forum