Consultation on the changes to Early Years Funding Formula

Closed 24 Jan 2017

Opened 20 Dec 2016

Overview

As you will be aware, on the 11 August 2016, the Department for Education (DfE) published a national consultation seeking views on proposals to change the way in which both local authorities and childcare providers are funded from April 2017 onwards. East Sussex County Council and many local providers submitted responses prior to the consultation closing on 22 September 2016.

The proposals set out within the DfE's consultation document can be summarised into the following areas:

  • Changes to the funding arrangements from central government to local authorities
  • Changes to funding arrangements from local authorities to early years providers
  • Meeting the needs of disabled children and children with special educational needs.
  • Transition to the new funding arrangements.

The Government have published their response and associated changes to statutory guidance. These can be found here  In light of these changes East Sussex now needs to consult with early years providers across the sector on the changes to the EYFF. It is important to understand that any financial amounts which are referred to are indicative and cannot be relied upon as the final settlement.

Why We Are Consulting

In developing the proposed national funding formula (the funding the Government pass to East Sussex County Council), the DfE states that it has drawn on evidence collected from the 'Cost of Childcare Review' to identify the key drivers of cost variation. The proposed formula contains the following three factors:

  • A universal base rate of funding for each child
  • An additional needs factor
  • An area cost adjustment

The Government consulted on 3 key areas; capping the funding local authorities utilise to discharge their statutory duties, requiring local authorities to have an 'inclusion fund' to support children with SEND and obliging councils to have a nationally shared approach to their local formula (the way we pass money to providers), namely:

  • A universal base rate for all types of provider
  • A mandatory deprivation rate
  • A choice of several additional supplements (e.g. rurality, flexibility)

East Sussex's current formula structure is already largely in line with the Government proposals. As such, we are consulting on a very small number of changes to this:

  • We will retain a base rate which is the same for all types of provider (ESCC already does this). We do expect this to increase in line with the illustrative funding allocations provided by the Government to East Sussex
  • We will retain a deprivation rate and continue to use the current calculation mechanism
  • We will consult on the proposal that the current ‘Quality’ supplement is removed to ensure that East Sussex can meet the DfE’s requirement of all providers receive a minimum of £4.00 an hour per child via the universal base rate.

The consultation will close on Monday 23rd January 2017. Following this, we will be working to model the impact of the changes and will publish a final structure to all early year’s providers

What Happens Next

After the results have been processed East Sussex will provide all EYEE providers with the rates for 2017/18

Areas

  • All Areas

Audiences

  • Businesses
  • Community groups or organisations
  • Voluntary groups or organisations
  • Faith groups or organisations
  • Providers of services

Interests

  • Children and young people