Particular issues were raised about funding based on participationrather than places.
All of the local authorities present said they would not be able topreserve their maintained nursery schools without taking funding fromthe schools budget.
In Birmingham they had earmarked 'a safety net' fund for two years toprotect 25 nursery schools, which would suffer with cuts to their hoursfrom full-time to part-time based on funding through take-up rather thanplaces.
Lesley Adams, head of integrated services for children and families,told the committee that because funding was also based on deprivationfactors, some nursery schools which are not in deprived areas would loseout because some of the funding will go to PVI nurseries.
Asked whether the council would need to reallocate funding from theDedicated Schools Grant, Ms Adams said, 'I believe so. We have alreadybeen to the Schools Forum to say that is our belief, so it is aware ofthe pressures that are on us. There will need to be more in order to doeverything we are being asked to do and keep nursery schools open.'
Local councils also revealed flaws in the cost analysis process, withlow return rates and incomplete forms from some PVI providers.
Jamie Lang, finance manager at Sheffield council, reported that aftercarrying out the process twice, only 31 per cent of providers responded,with no returns from childminders or independent schools withnurseries.
Questioned by MPs later in the session, after announcing she had decidedto delay the implementation of the formula, Dawn Primarolo also hintedthere might be flexibility in the way the formula is applied regardingfunding by participation rather than places.