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The Department of Education has today revealed that it is launching a consultation into how it funds free childcare and early education for three- and four-year-olds.

 

Documentation on the consultation says that it will look to introduce a new national funding formula, and proposes changing the way local authorities fund early years providers in their area.

 

It also intends to make sure that children with special educational needs or disabilities attract the extra funding they need.

 

Having long argued that early years funding needs radical reform, Neil Leitch, chief executive at the Pre-school Learning Alliance, said that he welcomes the consultation which plans to move towards a universal base rate of funding for all provider types.

 

“We also welcome the proposal to limit the proportion of funding that local authorities can retain to 5%, especially given that the latest DfE statistics suggest that more than half of local councils currently exceed this amount,” Neil said.

 

However, Neil noted that distribution of funding is only part of the story, and said that if the central pot of early years funding is insufficient, then no matter how well it is distributed, those on the front line are likely to lose out.

 

“Given that the government still has no idea what the hourly cost of delivering childcare is, there is a danger that today’s proposals will mean that many providers will receive more funding, but still not enough,” Neil said.

 

The consultation documentation also failed to mention how sufficiency of funding will be monitored moving forward.

 

Neil highlighted his concern that there remains no mechanism in place to ensure that early years funding rates will allow for changes in delivery costs, including the national living wage which will have increased from £7.20 to £9 by 2020.

 

“Add to this the rising costs of rents, utilities and so on, and it’s clear that without a plan to ensure that delivery costs are covered going forward, we will be back to square one in a few years’ time,” Neil said.

 

“As such, we look forward to working with the government to ensure that the positive changes announced today are part of a wider package of reforms that ensure the sustainable funding of the early years sector in the long term.”