Government’s plans for Early Years funding is bad news for Cornwall

Here we go again, on one hand the Government says it wants to increase free childcare hours from 15 to 30, but the reality of this is their current plan puts Cornwall’s Early Years provision in a worse position than it is because of the Government’s new funding formula plans for this sector.abc

The Government is introducing a new national formula for funding its 30 year childcare offer and is due to formally confirm the proposed funding rate for Cornwall at the end of December.  While both the Council and providers support the principle of a national formula, the suggested rates for Cornwall would see a 1% increase in funding per child – an additional 4 pence per hour – significantly below the national average increase of 5.7% – and making Cornwall the third worst funded local authority in the country!

Cornwall is one of the worst funded authorities for Early Years, Higher and Basic Needs. So when there is a funding review, being near the bottom of the pile you think it will improve. Yet for Cornwall the review which the Government is currently undertaking has the potential to put us in a worse position, yes worse….

This is very, very bad news for parents, children and early years’ providers in Cornwall. As one of the Early Innovator councils chosen to help pilot the new 30 hour childcare offer, we have been working closely with providers from across the private, voluntary, independent and maintained sectors over the past 12 months to draw up plans for the introduction of the new provision in September 2017.

The Government has to rethink its plans on the Government to significantly increase the rate of funding it is proposing to allocate to Cornwall to provide additional childcare hours to prevent the risk of large numbers of early years providers going out of business.

In Cornwall we have a committed, high performing early years’ sector in Cornwall, with around 92% of our settings rated as “Good” or “Outstanding” by Ofsted.  There are around 11,000 three and four-year olds in Cornwall and we know from talking to parents that almost three-quarters of those currently using childcare would like the additional 15 hours.  More than half of parents also say that the new provision will allow them to increase the hours they work or to change their jobs which will help to drive our economy.

However, the very clear message from providers is that the rates being proposed for Cornwall by the Government are so low they will not meet minimum staff costs.  Many are saying that not only does this mean they will be unable to provide the additional 15 hours offer, they would not be sustainable at all and would close.

The Council already allocates over 99% of the funding it receives to providers and so there is no additional funding which can be used to meet any shortfall in funding from the Government. It will have to come from within existing budgets, which in turn could lead to further service cuts.

Currently, the Government gives Cornwall’s providers £3.86 per hour per child, but the true cost in reality is around is at least £5 and that is the minimum estimated amount to cover costs. Providers in trying to balance the books, charge extra per hour for the additional 15 hours, but this will go when the additional 15 hours is introduced. I also fail to understand the headline national figure under the funding formula review is £4.88, yet Cornwall gets over a pound less.

Many early years providers in Cornwall have already been struggling to meet their costs, and in January the Council introduced an 18 pence per hour increase in the money we pay as a short-term emergency measure because of the lack of government funding. This was only intended as a stop-gap measure pending the outcome of the consultation, however, and there is no money to continue with the payment after March.

As I said the 18p is a temporary measure and will go from March 2017, which in turn means with the poultry 4p increase suggested by the Government, will actually see less money for providers. If the Government does not increase the rate currently proposed for Cornwall, over 90% of our 500 early years providers will see cuts in their funding of between £1,640 to £5,594 a year.

Cornwall’s nursery schools, which are used as centres of excellence and training, seeing an average grant reduction of £157,000 a year.  These cuts will have a serious impact on what has been a vibrant and hard-working sector in Cornwall and could see many settings close.

Unintended consequences of the minimum wage increases this year by approximately 7.5% an hour, yet, high quality nurseries remain sustainable with a  2.74% decrease in funding per child per hour.

The important thing to me, the Council and providers is that we want to build on the success of our early years programme, not see cuts in provision for children and parents in Cornwall.

Therefore I am calling on the Government to guarantee a minimum level of funding through the Area Cost Adjustment which reflects our specific needs. Government, you need to rethink your plans…..

In lobbying, we have written to the Minister and Cornwall’s six MPs. I wonder if that will do any good…

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