Agenda item

(To receive a report by Geraldine O'Neill, Sustainability & Development Manager – Children’s Education, which provides summary of the Early Years National Funding Formula for 2023/24 and details the funding distribution for early years providers in Lincolnshire in 2023/24)

Consideration was given to a report by the Sustainability and Development Manager – Children’s Education, which provided a summary of the Early Years National Funding Formula for 2023/24 and details the funding distribution for early years providers in Lincolnshire in 2023/24.

With reference to the report, the Sustainability and Development Manager – Children’s Education provided details of National Funding to Local Authorities for Early Years Core Funding which would be issued to Providers and Schools, including details of the local universal base hourly rate per pupil; details of the supplements available to providers, including the deprivation supplement; the SEN inclusion Fund; Fluctuation Contingency Fund, Local Authority Centrally Retained Funding; Lincolnshire’s Early Years Funding Distribution for 3 and 4 year olds; Disability Access Funding (DAF); Early Years Pupil Premium (EYPP); 2 Year Old Funding and Lincolnshire’s Early Years Funding Distribution.

The DfE had published the final budgets on the 16th December 2022, which was later than planned. All associated technical notes and operational guidance had been reviewed and used to implement the funding changes for the next financial year.

The local authority’s rate would be £4.87 per hour, which was a 23p increase on the current rate of £4.64.  This rate included the teachers’ pay and pension grant (TPPG) which was previously allocated through a separate grant allocation.  Lincolnshire continues to be funded on the lowest funding rate.  Lincolnshire was one of 35 Local Authorities funded at the minimum level.  

Lincolnshire's hourly rate was £4.90 without protections or gains caps applied. Lincolnshire’s hourly rate has been reduced by £0.03 per hour due to the Government’s enforcement of a ceiling cap of 4.9%.

This was recognised as disappointing for Lincolnshire. Colleagues within the local authority had the opportunity to raise these concerns directly with the Early Years funding division at the DfE.

Lincolnshire would continue to receive supplementary funding for the Maintained Nursery Schools (MNS) and local authority colleagues would work with Lincolnshire MNS’ to agree the distribution of supplementary funding amounts for next year.

There had been an increase from 10% to 12% of the total value of funding for 3- and 4- year old’s to go through supplements. This was to take account of the TPPG being included in the formula.

A summary of the background information that supports the theory within the formula was explained. 

Centrally retained funding was proposed as £1.627m, which was an increase of £66,000 to reflect the current and forecast pay in 2023/24 for the Early Years and Childcare Support team. This included the pay award and maintenance costs for the system used to provide monthly payments to providers. This represented 4.39% of the overall planned early years funding and was below the threshold of 5%.

An explanation detailing the breakdown of all the elements within the 3&4 year old funding and the equivalent hourly rate was provided. This provided pass-through funding of 95.61% to providers in 2023/24 (this was 95.77% in 2022/23).

The value of all supplements was 5.08%, which was below the 12% threshold.

2-Year-Old Funding had increased by £0.06p per hour to £5.63 per hour per child from central Government. Lincolnshire's indicative allocation for 2023/24 was £4.947m using the January 2022 census data. 

The Local Authority had retained funding for a contingency fund before determining the funding rate to providers to avoid overspends occurring on this budget. An annual budget of £0.249m was required, which represented 5.09% of the overall budget. 

There was a growing concern across the childcare sector regarding funded education investment, particularly with the cost-of-living rises. The Local Authority recognises the financial demands placed on the early years sector through increased costs and has applied a rate increase from the Government’s financial settlement to support this.

Consideration was given to the report and during the discussion the following points were noted:

·      There continued to be a high level of take up for early years funding support. At the end of the term for Autumn 2022, 84% of 2 years olds were accessing places with support from early years funding, however the number of people accessing support fluctuated throughout the year. It was noted that the number of children eligible for early years support was decreasing on a national scale.

·      The Forum thanked the team for their work in producing the formula.

·      The Forum emphasised the difficulties many families faced in raising fees for nursery places, particularly those in deprived areas. The Forum was reassured that the Council continued to make representation to the Department for Education who were communicating on this issue.

·      Concerns were raised over the cost impact to early years settings on providing additional support to children with special educational needs. Officers had acknowledged the cost impact and a detailed consultation exercise was planned to provide clarity on what additional costs were and where funding could be best distributed.

RESOLVED:

1.      That the report be noted;

2.      That the Local Authority’s proposals for centrally retained funding          be agreed.