Early Years Funding Formula
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- Russell Strickland
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1 Early Years Funding Formula 1) Introduction When formulating the proposed formula we have considered the views of representatives from the sector who are members of the Early Years Provider Reference Group. All providers are invited to respond to these proposals by completion of the online survey by 3rd December 2018 Section 2 below details our proposed local formula for implementation from April 2019, in which we have sought to maximize funding within the base rate where possible to give providers maximum flexibility to determine operating models whilst providing sufficient funding for the SEN inclusion fund and deprivation supplement. Section 3 outlines some alternate formula alternatives for your consideration and Section 4 details statutory options in relation to the timing of funding payments to providers. Early Years National Funding Formula Funding to local authorities is calculated on the basis of 3 factors; a universal base rate of funding, plus additional needs factors and then multiplied by an area cost adjustment. For Cambridgeshire this results in overall funding of 4.42 per hour: 4.42 = ( ) x ) Proposed Cambridgeshire Early Years Funding Formula Supplements To keep the formula as simple as possible and to keep funding within the base rate, deprivation will remain the only supplement within the formula. This would be allocated in the same way as at present at the following rates: Rank Residence of child Value per Rank hour 1 Highest 10% per
2 2 Next highest 10% per 3 Third highest 10% per 4 Fourth highest 10% per 0 Remaining 60% least deprived SEN Inclusion Fund Funding of 0.5m per year will be provided from each of the High Needs and Early Years Blocks of funding to support the creation of an SEN inclusion fund (SENIF) totaling 1m. The SENIF will provide funding for 3 and 4 year olds who are accessing either their Universal, or Extended Entitlement to early learning and childcare and who have complex additional needs, or an Education Health and Care Plan (EHCP). Funding will be provided in the form of top-ups or lump sums for providers according to the needs of individual pupils. Early Years Centrally Retained Funding The Early Years Funding guidelines restrict local authorities to retaining a maximum of 5% of funding centrally from 2018/19 onwards. The proposed funding retained centrally by the Local Authority to fund our statutory duties will account for approximately 3.6% of the funding provided (dependent on pupil numbers) which is lower than this statutory maximum. The following table shows the proposed centrally retained amounts for the financial year : Centrally Retained Budget Value Qualifications and supporting work 375,000 Commissioned Services Linked to Early Years childcare development and Support 245,580 EY Access Officers 88,355 EYPP Eligibility 11,000 Contribution to support Early Years Service statutory duties 340,000 Total 1,059,935 An amount of 130k has been retained in the previous two financial years to support the implementation of the extended 30 hour entitlement. This amount will not be retained for the financial year 2019/20. What Base Rate does this give? Overall funding paid to local authority 4.42 Less: Est. Deprivation Funding 0.14 Less: SEN Inclusion Fund contribution 0.07
3 Less: LA centrally Retained Funding 0.16 Base Rate to all providers 4.05 This base rate is 0.06 higher than the base rate that would be received if the LA were to retain the full 5%: Overall funding paid to local authority 4.42 Less: Est. Deprivation Funding 0.14 Less: SEN Inclusion Fund contribution 0.07 Less: LA centrally Retained Funding 0.22 Base Rate to all providers 3.99 Funding in addition to the hourly rate Deprivation Supplement: Will continue at the rates outlined earlier in this document. Early Years Pupil Premium: Will continue to be paid at a rate of 0.53 per hour for eligible children. Disability Access Funding: the 615 lump sum paid to settings for eligible children will continue. Top-up funding due to EHCPs or from SEN Inclusion fund: Funding rates will continue to be determined based on the individual needs of the child and in accordance with separate published policy and guidelines. 2 Year-old funding 2 Year-old funding will continue to be administered in the same way as currently. Cambridgeshire will receive a rate of 5.41 and this will be passed on in full to providers from April 17 onwards. Funding to Nursery Schools As yet there is no guidance available from the DfE about the continuation of the Maintained Nursery Supplement which funds both the MNS lump sum and 0.75 hourly supplement. If the funding is not received by the Local Authority then these two funding elements will be discontinued. We anticipate an update in December 2018 at which point a further communication will be made. 3) Timing of funding to providers We moved to monthly payments for childminders (Table 1) in September 2016 in response to changes to the statutory guidance and following consultation earlier that year. Schools are also paid on a monthly basis. All remaining providers have been paid on a twice termly basis (Table 2) with an Interim payment at the start of term and a reconciled payment later in the term after the actual figures are known. Adjustments have been paid toward the end of term for all providers.
4 Latest statutory guidance published in June 2018 requires local authorities to; Pay all providers the full amount owed to them monthly unless they have good reason not to do so, for example, if, after consultation, the clear majority of providers opt for an alternative method of payment. Currently, the system used in Cambridgeshire does not accommodate monthly payments. Although we have been making monthly payments to childminders and schools, this has been done on a manual basis and we do not have the resources to do this for 700+ providers. We would like to know whether monthly payments is something that would be useful to the providers who currently receive the Interim and payments and if you feel we should be pursuing this resource. - There is a time implication involved to resource a new or additional system and then to implement this so it would in all likelihood be available in There is a cost implication to resource a new or additional system which may impact on the overall budget for Early Years Funding In order for us to pursue this option, there needs to be a clear majority of more than 80% of providers, excluding childminders and schools, requesting a move to monthly payments. Monthly payments to childminders and schools are currently administered as detailed in table 1 below: Payment Month 1 Month 2 Month 3 Month 4 period Summer 25% 25% 25% Reconciled to Autumn 25% 25% 25% Reconciled to Spring 25% 25% 25% Reconciled to Table 1 Currently for other providers there are 3 payment periods annually as shown in table 2. Payment Period % at Interim Final payment timescale Summer 60% Reconciled and paid 9-10 Autumn 75% ( 2018) Reconciled and paid 9-10 Spring 60% Reconciled and paid 9-10 Table 2 4) Next Steps We want to hear your views regarding these proposals and encourage you all to complete the online survey. This will be open until 3rd December 2018.
5 We will use the responses received to formulate the Cambridgeshire Early Years Funding Formula for and will publish the results of the survey and our recommendations for final comment in advance of presenting the final recommendations to Cambridgeshire Schools Forum in February Consultation Questions Question 1: Do you support the proposed funding formula? Question 2: Which payment option do you support? a) Continue with the current arrangements b) Move to monthly payments Question 3: Do you have any other comments regarding the Cambridgeshire Early Years Funding Formula?
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