All but five local education authorities (LEAs) in England have now responded to the Freedom of Information request, which NDNA sent to 149 councils last November.
In February, Nursery World reported initial findings that showed that councils had underspent early years funding of £55.5m for 2019/20, but this has now risen to £62m, with all but five local authorities in England having responded to the FOI.
A higher proportion of LEAs (74 per cent totalling 107 councils) reported underspends.
Surrey County Council has the highest reported underspend of £3.7 million.
The final figures show 19 LEAs in England underspent by more than £1 million in 2019/20, and of these, seven had underspent by a similar amount in the previous year (see table below).
Just one in five local authorities that reported an underspend gave any of this unspent funding to providers.
Many more LEAs (55) than previously reported put their underspends into their reserves – equivalent to 51 per cent of those that reported an underspend – totalling £30m.
More councils used their unspent funding to offset deficits elsewhere, up from a quarter to a third.
The NDNA said that despite raising this issue a year ago with the Treasury and the Department for Education, with promises from the Government to look into the issue, millions of pounds of early education and childcare funding is still not reaching providers.
Less money reaching childcare providers would led to early years settings offering fewer places to families due to affordability. If money earmarked for childcare places is not being converted into creating places, children and families will suffer, particularly in areas of deprivation, it added.
Purnima Tanuku, chief executive of NDNA, said, ‘With almost all local authorities now reporting back to us on their early years spending, we have seen some alarming levels of underspent budgets at the end of 2019/20, just as the pandemic was really hitting.
‘We have now seen that underspend figure rise to above £62 million, with only a limited number of councils setting out plans to use this to support providers.
'There are a number of issues with the way early years funding works, from the spring funding decision to historic underfunding of the rates themselves. More than ever it is crucial that funding for the sector reaches providers as they struggle to keep their businesses sustainable.'
Key findings:
- 107 LEAs (74 per cent of those that responded) reported an underspend for 2019/20.
- 55 LEAs (51 per cent) put their underspent money (£30.2 million) into their reserves or rolled it forwards within their Designated Schools Grant (DSG) budget.
- 36 LEAs (34 per cent of those with an underspend) used
Ms Tanuku added, ‘We have seen recent reports on the costs of childcare to parents and the precarious position nurseries are in. With millions still not reaching the front line this situation will only be getting worse until the system is fixed.’
|
Underspends totalling more than £1 million 2019/20 |
||
|
Local Education Authority |
Total underspend £ |
Agreed actions relating to underspend
|
|
Surrey* |
3,732,000 |
The underspend remains in EY block |
|
Hertfordshire* |
2,336,000 |
This is carried forward to future years (as part of the overall underspend of Dedicated Schools Grant) to support the Schools Budget |
|
Hampshire |
2,330,649 |
Any early years underspends form part of the overall position on the Schools Budget |
|
Greenwich |
2,185,340 |
Proposed to allocate underspend among all the 3 and 4 year olds in the Borough regardless of setting |
|
Birmingham* |
1,800,000 |
Fully redistributed back to the whole sector as an additional hourly rate based on Early Education Entitlement actual headcounts 2019/20 |
|
Islington* |
1,671,000 |
A retrospective increase to the base rate and deprivation factor for 3 and 4 year olds following the outcome of the 2020/21 Early Years Funding Consultation |
|
West Sussex* |
1,406,000 |
Agreed by the Schools Forum to transfer to DSG reserve to support overspending on High Needs Block |
|
Waltham Forest |
1,374,487 |
Underspend will be re-allocated through the reserves plan over the next 3 financial years |
|
Ealing |
1,294,000 |
Underspend rolled forward |
|
Havering |
1,260,000 |
Absorbed as part of the overall DSG carry-forward balance to reduce deficit |
|
Warwickshire |
1,194,000 |
Underspend clawed back by ESFA |
|
Lambeth |
1,122,000 |
To be used as contingency 20/21 |
|
Cambridgeshire* |
1,120,000 |
The underspend partially offset the overall DSG deficit |
|
Bromley |
1,110,000 |
Rolled forward |
|
East Riding |
1,100,000 |
The variance was carried forward into the 2020/21 budget |
|
North Yorkshire |
1,100,000 |
£255.8k additional financial support was paid to early years providers during the Summer 2020 term |
|
Sheffield |
1,100,000 |
Part contingency, part to be invested in EY sector |
|
Leicester |
1,085,000 |
Rolled forward |
|
Gloucestershire* |
1,064,000 |
£200k retained, the rest to support providers |
* These LEAs also reported underspends of over £1m in 2018/19
Source: National Day Nurseries Association analysis