A local authority is reviewing planned changes to early years funding following a backlash from childminders who fear they will have to stop offering the free entitlement.
Leicestershire County Council told providers it would be halving the frequency of payments from this summer.
The changes would mean providers would be paid once at the end of term for the actual hours provided, rather than in two stages – 70 per cent based on the previous term, and an adjustment.
The council claims it needs to ‘streamline’ to reduce administration costs following Government cuts and also benefit childminders with a simpler, less time-consuming system.
But Samantha Littlejohns, whose business is 90 per cent reliant on the free early education entitlement (FEEE), said that to manage longer gaps between payments, ‘I would need to take out a bank loan.’
Ms Littlejohns, who runs a setting in Earlshilton with co-childminder Maxine Ellis (pictured), said, ‘In effect, I’m crediting the council. I’m in touch with seven childminders across the county in a similar position. It’s having the most effect on settings with 70-90 per cent funded children.’
A council spokesperson confirmed that at least seven formal objections had been made and a number of other providers had raised concerns. The council has now decided to delay the start of the new regime, allowing the summer for transition. At the time of going to press, the council said exactly how the changes would be rolled out from autumn were still ‘under review’.
‘It has been brought to our attention that a few providers feel that the payment date being so late in the funding period does pose some financial difficulties and cash flow issues.
‘In order to offer a flexible payment system for childcare providers we have reviewed the way we collect information about take-up of the free early education entitlement places and the timing for making payments. As part of the review we sought the thoughts of more than 600 providers.
‘Following feedback from a number of providers we are looking again at the times for payments to reduce the impact the change will have. We are now looking to introduce the new method for the autumn term, and will make sure all providers are kept well informed of the changes and new dates.
‘In order to support providers we are introducing a higher initial payment, and along with the collection of headcount data later on in the term, this new system should allow for more accurate payments.’
Ms Littlejohns said this would help, but an advance payment promised on 26 August for the autumn term will only cover her until 9 November. Funding to cover care to the end of term on 16 December will not arrive until 6 January next year, leaving her more than £1,000 short.
She added, ‘I think we’re at real danger of being downgraded because the council aren’t fulfilling their agreement with the providers. There’s no way I can offer care for free and still offer a good level of service. I don’t think I’ll be able to continue offering funded places.
‘The Government are trying to push the free two-year-old care and extend the 15 hours, but I can’t afford to provide it.’
Barnsley childminder Sue Sephton-Ford praised her borough council for the service it provides.
Ms Sephton-Ford said in her area, the two-year-olds funding is all paid up front, while three- and four year-olds funding is paid 80 per cent in advance, followed by an adjustment.
She said, ‘In Barnsley you feel like the council is desperate to help you.’
But Victoria Flint, PACEY’s communications director, said the organisation was aware of wider problems and had responded to the Commons Public Accounts Committee this month.
In addition, the Department for Education has acknowledged issues with payment frequency in its consultation, ‘Childcare free entitlement: delivery model’, launched this month, which states that 174 councils have signed up to a ‘Prompt Payment Code’.
Ms Flint said, ‘It is an issue our members have flagged with us.’