To consider a report that sets out the Early Years Reference Group and Technical Sub Group report relating to funding allocation.

The Forum received and considered a report which set out information regarding the Early Years Funding Block and provided feedback from the Early Years Technical Sub Group regarding the use of the Early Years reserve being transferred into an Early Years Capital Fund and proposed changes to the base rate of the Single Funding Formula.  The Forum had requested a report which provided financial details at the June 2015 meeting.

The Early Years and childcare quality and sufficiency Officer provided an overview to the Forum of the information contained within the report. There were 6 recommendations and the discussion considered the background to each recommendation in turn.

At the June 2015 meeting, the Forum noted that the reserve of the Early Years Block stood at £2.43m.  Following a transfer of £500k to the Schools block the balance as at 31 December 2015 was £1.93m.

The Forum noted that the funding for disadvantaged 2 year olds has been altered to reflect the actual number of eligible children participating (instead of demographic information) in early education as at January 2015 early years census and school census (344 pupils).

The use of the Early Years Reserve was detailed in the table in paragraph 12.  At the end of March 2016 it is anticipated that the reserve  will stand at £1.4258m which is broken down as:

£771.85k from 2 year old reserve and;

£654k from 3 and 4 year old reserve.

It is anticipated that £630k will be transferred to the reserve at the beginning of 2016/17.

The capital element of the DfE funding awarded for 2 year olds has a limited dedicated capital sum and although the Council negotiates and receives S106 as a result of housing growth, there is a need to provide further EY provision as a result of non housing related demographic growth and to top up DfE capital grant capital Council for new and expansions of early years provision.  The proposal is to request the Secretary of State to allow the disapplication of school funding regulations to a sum of £1.1m of the Early Years Reserve and transfer to the Early Years Capital Fund.  The capital sum would draw £500k from the 3 and 4 year reserve and £600k from the 2 year reserve.  The Forum noted as an example a new provision, on a  new lower school site for 45 new EY places were being provided in Cranfield University, at a cost of £547k.  The additional funding would enable other projects to be considered, following due process.

The DfE provided the following indicative allocation for 2016/17:

3 and 4 year old entitlement: is set at the 2015/16 per pupil rate of £3,979.80.  The initial allocation for 2016/17 had been calculated by calculating the per pupil rate by the January 2015 early years census.  This will be updated in July 2016 by recalculating using the January 2016 pupil numbers and in July 2017 based on 5/12^ths of the January 2016 pupil numbers (to cover the April 2016 to August 2016 period) and 7/12ths of the January 2017 pupil numbers (to cover the September 2016 to March 2017 period).

Participation funding for disadvantaged two year olds: set at the 2015/16 per pupil rate of £4,778.50, by multiplying the number of pupils (344) times the amount per pupil.  The allocation will be updated in July 2016 and July 2017 taking into account the January 2016 and 2017 census’ accordingly.

Early Years pupil premium:  set at 2015/16 per hourly rate (53p).  The allocation will be updated in July 2016 and July 2017 taking into account the January 2016 and 2017 census’ accordingly.

The introduction of the National Living Wage, increase of 50p per hour, will impact on School Providers.  The Forum were therefore asked to increase the rate per child per house on all base rates by 15p to help offset the increased impact on School Providers.

There has been a procedural change to the way the indicative allocations are calculated.  The calculation will use the following data:

January 15 census – period April 16 to Mid May 16

May 15 census – period mid May 16 to end September 16

October 15 census – period October 2016 to end March 17

The current formula uses January census when calculation the indicative 3 & 4 year olds allocation, which then is adjusted to take into account May and October census.  The proposed change will give providers a better budget estimation which will help them with financial planning.

The change had been consulted with both the Early Years Reference Group and Schools Forum.

From September 2017 it is anticipated that a nationally adopted figure following 30 hours will become the universal level.  It is required under the 2015/16 Schools Forum Powers and Responsibilities document, to gain Schools Forum approval for centrally retained Early Years funding.

The Forum expressed concerns about the layout of the report as it did not contain a breakdown of how the funding was to be spent.  The Forum were reluctant to agree to the holding of the £2m without this information.  It was requested that a report be brought to the March meeting laid out as the High Needs Block funding paper with the breakdown of actual and projected spends.

The Forum also requested that the Early Years Technical Sub Group be immediately separated from the Early Years Reference Group.  The Technical Sub Group should only contain members of the Forum and relevant officers.  It was proposed that both groups could meet on the same day but that no non-Forum members should be part of the Technical Sub Group.

RESOLVED

1.         That the spend of the Early Years Reserve through 2015/16 be agreed.

2.         That a request to be made to the Secretary of State to allow the disapplication of school funding regulations to a sum of £1.1m of the Reserve, and enable the transfer of this sum into an Early Years Capital Fund be approved. 

3.         That the 2016/17 indicative DSG Early Years Block Allocation be approved subject to further detail being provided.

4.         That an increase of 15p per child per hour on all base rates be approved.

5.         That a contingency of £491,377 be held from the 2016/17 indicative allocation with the Early Years Block, be agreed.

6.         That a procedural change to the local Funding Formula for 2016/17 be noted.

7.         That the funding for two year olds and the Early years Pupil Premium are held centrally with monthly payments based on participation be agreed.

8.         That a report providing the detailed proposed financial spend for 2016/17 be considered at the March meeting, in the same layout as the High Needs Block funding detail.