The figures are revealed in the published rates of funding for local authorities in the spring term, which has been published by the Department for Education.
The DfE also confirmed that it would go ahead with calculating spring term funding on the basis of January 2021 census numbers, not continuing with the last two terms' model of basing funding on pre-pandemic numbers.
The only exception will be for local authorities where attendance is less than 85 per cent of 2020 levels at the time of the census, but increases during the course of the term, in which case a top up will be provided up to a cap of 85 per cent.
The promised £44m increase in early years entitlement funding, announced in the Spending Review, is the equivalent of an 8p per hour increase for the two-year-old rate, and a 6p per hour increase for most three- and 4-year-old places.
There will be a minimum funding floor for local authorities rising to £4.44 per hour.
Children’s minister Vicky Ford has said that this is sufficient funding to cover the rise in the National Minimum Wage from April.
However, early years organisations dispute this and condemned the announced rates as showing ‘a lack of respect’ for the sector, which is struggling to survive with fewer numbers of children returning to settings due to the pandemic, and unlike schools, has received no extra funding to cope with the costs of operating in the pandemic, such as extra cleaning and covering staff absences.
The DfE’s own survey of childcare and early years providers and Covid-19, which has just been published, shows that just 42 per cent of group-based childcare providers and 51 per cent of childminders believe it would be financially sustainable to continue to run their childcare provision for another year or longer. This second wave of Government research was carried out between 25 September and 18 October 2020.
'Incredibly disheartening'
The Early Years Alliance described the rise in funding as ‘miniscule’, and said it would do nothing to help nurseries, pre-schools and childminders survive.
The National Day Nurseries Association said the figure for three- and four-year-olds was an extra £1.14 per week per child – less than the cost of a packet of baby wipes.
Commenting, Neil Leitch, chief executive of the Early Years Alliance, said, ‘Today’s Department for Education figures confirm that the 1.2 per cent increase in early years funding will equate, at best, to just 6p or 8p per hour per child in practice for childcare providers across England.
“At a time when the Government is pledging at extra £2.2bn for the core schools’ budget, it is incredibly disheartening to see just how little early years education and childcare is valued in this country.
'This is despite a wealth of research showing that the first five years of a child’s life are absolutely pivotal to their long-term learning and development, and the fact that there are more than a million families with children aged under five where both parent – or, the lone parent in lone parent families - work.
‘After years of inadequate funding, and at a time when the continued impact of the pandemic is putting so much financial pressure on providers, the miniscule funding uplifts confirmed today will do nothing to deliver the support that nurseries, pre-schools and childminders need to survive in the long term.
‘If the Government values both quality early education and accessible, affordable childcare, it needs to give the sector that delivers both the investment it needs and deserves.’
Early Education said that in the context of the many other funding pressures and the impact of the pandemic, this seems to leave the sector potentially still facing huge funding challenges.
Chief executive Beatrice Merrick said, ‘This is disappointing news, as we know that so many providers are already struggling, and that in many cases attendances are far from recovering to pre-pandemic levels. We believe it is based on flawed assumptions about the rate at which children will return to settings and the number of hours they will take up.
‘The decision is surprising in the light of their own newly published evidence showing that providers are still seeing significant impact on income from parent-paid fees.’
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said, ‘It is beyond disappointing that the Government has only seen fit to increase the hourly rate for funded childcare by a few pence per child.
‘For three- and four-year-old places, the additional 6p per hour will give providers an extra £1.14 per week per child. This doesn’t even cover a pack of baby wipes.
‘Early years educators were praised by Ofsted’s Chief Inspector this week for their “resilience and creativity” in giving our youngest children the best learning experiences they can and supporting their development and wellbeing. And this is clearly not recognised as valuable by Government.
‘The guidance linked to today’s announcement stating the Government will no longer fund early years providers from January at pre-Covid levels is really the last straw for childcare businesses.
‘The Secretary of State for Education appears not to care about the early years sector and is treating providers appallingly compared with schools. At every turn he is giving additional financial support to schools for staff absences, for cleaning products, for additional resources, but nothing for early years.
‘To give early years providers this news as they are about to close for Christmas, knowing they will have to be on standby in case there are any reported cases of Covid in their nurseries from Christmas Eve, just shows a lack of respect for their hard work and dedication throughout this pandemic.
‘Last week official figures showed there were 61 per cent of the usual numbers of children in nursery. So, their parental income has dropped while their operating costs have risen. The one-month extension to the furlough scheme is of little help to childcare businesses who are suffering a staffing crisis and need their employees in work.
‘They can’t square this circle. According to the DfE’s own survey published today, only 42 per cent of providers believe they can continue to run their setting. To then reduce the funding lifeline which is keeping most of these businesses afloat is disgraceful.’
Sue McVay, director of membership and services at the Professional Association fro Childcare and Early Years (PACEY), said, 'PACEY, alongside our members has been desperately waiting for this announcement and it comes as a huge disappointment that DfE will not be extending its support into next term.
'The announcement comes at a time when early years providers are still struggling to recover from the impacts of the pandemic, with reduced demand for services and increased costs to make their settings Covid-secure. The meagre increase in funding rates of just a few pence per hour per child will not go far enough in covering these costs, instead placing more settings into deeper financial difficulty.'
Nursery schools
The DfE has also published details of maintained nursery school funding in the Dedicated Schools Grant (DSG) funding allocations for 2021-22.
However, ministers have not yet announced how nursery school funding will be allocated in future to achieve a sustainable long-term solution, the allocations data reflects the £60m supplementary funding allocations with the The DfE said, ‘The allocation for September 2021 to March 2022 is conditional and may change.’ This is because:
Summer term funding 2021 will be based on the current formula (the £23m previously announced)
Autumn term 2021 and Spring 2022 funding is provisionally allocated as per the current formula (the balance of the £60m announced in the Spending Review) but the allocation of this funding could change following any ministerial announcements.
Commenting, Beatrice Merrick said, ‘We urge ministers to make an announcement about their plans for future maintained nursery school funding as soon as possible to remove the uncertainty currently hanging over the sector. Given the growing number of schools whose finances have been pushed into deficit by the pandemic, certainty about future funding is more vital than ever.
‘We welcome ministers' reiterated commitment to a long-term funding solution for maintained nursery schools and we hope local authorities will hold off on decisions about the future of their nursery schools until full details of a future funding formula are available.’
Funding from the Department for Education (DfE) to local authorities in the spring term 2021
The DfE funding document states:
‘The normal process for determining funding allocations for local authorities for the early years entitlements is to take an annual census count of the number of hours taken up by children in each local authority in January.
‘This is the mid-point of the academic year and so balances the relatively lower numbers eligible for the free entitlements in the autumn term and the higher numbers in the summer term. This means that local authorities would in normal circumstances be paid for the spring term 2021 based on the January 2021 census data.
‘In July we asked local authorities to continue funding providers as if coronavirus (Covid-19) had not happened and said that by exception we would base local authorities autumn term funding on the January 2020 census count. We also announced that our intention was to return to the normal funding process from 1 January, and use the January 2021 census count to drive funding allocations for the 2021 spring term. The number of children attending childcare has been increasing across the autumn term and attendance is much higher than during the first national lockdown.
‘Therefore, we will fund all local authorities on the basis of their January 2021 census for the spring term.
‘However, we recognise that the number of children attending childcare may not have returned to normal levels in all areas when we take the January 2021 census, and it may not therefore represent the mid year point in the normal way. This may cause concern for some local authorities who then see attendance rise over the course of the spring term.
‘Therefore, by exception, in a local authority where attendance is below 85 per cent of their January 2020 census levels, and where that local authority can provide evidence for increased attendance during the spring term, we will provide a top-up to their January 2021 census. ‘The top-up would only fund the additional places taken-up after the January 2021 census week count and would be limited to a cap equivalent to 85 per cent of their January 2020 census. This will give local authorities additional financial confidence to pay providers for increasing attendance later in the term.’
- Funding from the Department for Education (DfE) to local authorities in the spring term 2021 is available here