Funding for two year olds from 2013
The Department for Education announced yesterday £625m of funding to provide free early education places for two year olds from deprived backgrounds in England in 2013. We have looked into the detail of this announcement and worked out what it means for Childminders.
The Government has committed to making available free early education places (15 hours a week over 38 weeks) from September 2013 for the most disadvantaged two year olds in England. It reckons that about 20% of two year olds, or about 130,000 children, are entitled to free school meals or are in care and these children will be eligible for a free place.
To make this happen, the Government has passed a law telling every Local Authority that it must provide a free place in an appropriate setting to every eligible child from September 2013. The Government is also giving each Local Authority money to pay for this. The amount of money to be given to each Local Authority is fixed and is based on estimates of the number of children eligible for the entitlement and the cost in each area of providing it. These estimates seem reasonable and in fact quite generous for three reasons:
- although the obligation to provide places only starts in September 2013, funding has been calculated for the full year starting in April;
- because the target for provision goes up from 20% to 40% of eligible two year olds from September 2014 additional funding has been given so that Local Authorities can build up to the higher figure (“trajectory building”) – if the estimates about costs and eligible numbers are correct it actually provides enough money to fund the whole of the 40% entitlement from January 2014 by my calculations;
- an additional sum of between £661 and £945 per child has been allocated for “capital expenditure” in 2012/13 (they are obviously projecting an underspend in capital this year). This could be used to help pay for the Local Authority to convert an existing under-used property for use as a community nursery for instance.
BUT (I bet you could see that coming)…
The government cannot tell Local Authorities exactly how to spend the money they are giving them. With the funding for 3 and 4 year olds many Authorities spend substantial amounts of the funding they are given on central management, and some pay different rates to different providers using a complicated formula they have made up. To try and prevent this happening with this new funding and ensure success of the scheme the Government has set out guidelines that Authorities should pass all of the funding to providers and not retain any centrally, and pay the same rate to all providers with no adjustments or supplements related to the provision (but clearly defined supplements related to the child e.g. for additional needs or SEN are of course encouraged). However some Authority staff or council members may decide that they don’t want to do what they are told and recommend or approve something that favours what they believe is in the best interest of their residents: that’s how local government works, and is why in some areas some childcare providers appear to get a much better deal than others.
So what does this mean for childminders? Well, £4.85-£5.00 (which is what the funding rate works out at in most of the country) is not a bad rate – remember you are only providing 15 hours a week at this rate, so in a morning or afternoon session you wouldn’t be expected to provide any food. If you want some of this, I’d suggest you do something about it now and in the coming months to show your Local Authority how you can help them meet their September 2013 obligations within the funding they are going to be given. We will be coming up with some ideas at Childminder Focus to help you and we’ll let you know more about that soon.
If you think this is not enough – well I’m afraid you’re going to have a hard time convincing government of that – they are pointing towards the recent Daycare Trust cost survey which gave an average childcare cost of £3.95 per hour for two year olds in England. They say they have deliberately set the rate higher than that because they want to improve quality – and only want Authorities to give the funding to “good” or “outstanding” providers.
And if you are in Scotland, Wales or Northern Ireland, sorry for wasting your time – these countries have different arrangements in place for early years education and childcare.
Finally, if you would like to see how the funding works out in your area you can download our analysis of the data here.