Agenda item

Report CEF19013

The Schools’ Forum considered a report which provided an outline of the Local Authority’s (LAs) proposed review of the Early Years Funding Formula.  In July 2019 Bromley received notification of an increase to the Early Years funding block within the Dedicated Schools Grant of £2.3m which consisted of £1.45m relating to 2019/20 and a retrospective adjustment of £0.87m relating to 2018/19. Unlike the other blocks, Early Years funding was adjusted in year, either upwards or downwards, based on the January pupil numbers.  If pupil numbers and take up increased this would result in additional funding however if numbers/take up decreased then funding would be clawed back. This could vary across the three main elements within the Block i.e. 2 year old numbers may be decreasing but universal funding for 3 and 4 year olds and additional 15 hours numbers increasing - if this was the case the funding adjustment would be “netted off”.

The current pattern in Bromley was that 2 year old numbers/take up was decreasing but 3 and 4 year old numbers/take up was increasing for both the universal entitlement and the additional 15 hours. As a result of this Bromley was seeing a net increase in overall funding.

This adjustment had prompted a full review of the current EY funding formula by LA Finance and Early Years Officers to understand why the funding was increasing and to look at possible adjustments to the Bromley EY funding formula for 2020/21 to ensure that the increased funding was passed on to the EY providers to support EY education in Bromley.

The Schools’ Forum noted that at this stage the LA was proposing to increase the base rate which would mean an increase to all providers.  The Head of Schools Finance Support reported that the DfE settlement had been received the previous week and as a result an additional 8p would be added to base rate funding across all three elements in 2020/21 (bring the total increase in funding to 58p).  Members of the Schools’ Forum also noted that the review of EY Funding had also allowed for an increase of £0.5m to the funding that was held centrally to support Early Years pupils with SEND which was currently held in the EY Block with the LA continuing to meet the DfE’s required “pass-through” rate for the block.

In response to a question from the Vice-Chairman, the Head of Schools’ Finance Support confirmed that the funding that had been allocated to Early Years was being directed at Early Years provision and that there was no impact on other funding blocks within the DSG.  The Head of Schools’ Finance Support also confirmed that income would be adjusted upwards if it became apparent that pupil numbers were increasing.  The proposed review for 2021 would not be seeking significant adjustments but any changes would be presented to the Schools’ Forum for review.

In response to a question from the Vice-Chairman, the Head of Education and Children’s Services Finance explained that the increase of £0.5m for Early Years Pupils with SEND had been based on “pass-through” rates and a judgement by the  LA.  It was proposed that the funding would  be used for elements within the Phoenix Centre.

The Head of Early Years, Schools Standards and Adult Education reported that a recent meeting with Early Years providers had been positive.  There had been relief amongst providers that the LA was looking to increase rates.  It was acknowledged that the rates currently provided by the DfE did not cover the costs of delivery to the provider, and whilst the proposed increases would mitigate this to some extent the new rates would still not cover the full cost of delivery.  The Schools’ Forum noted that some providers had asked whether the new base rate of universal funding for 3 and 4 year olds could be increased by a further 2p to £5 per hour.  However, the Head of Schools’ Finance Support explained to the Forum that when multiplied by the number of hours and the number of children the 2p increase had a significant budgetary impact.  It was felt that it was prudent to keep to the proposed level and undertake a further review at a later stage.

The Head of Early Years, Schools Standards and Adult Education also explained to the Forum that the new system that was being implemented would enable the LA to pay providers monthly on an actual child basis.  This would ensure that the LA was paying the right rates for the allocated budget and would therefore have a positive impact on future reviews.

Noting the higher rates for 2 year old funding, the Early Years Representative on the Schools’ Forum explained that the funding was directed at the most vulnerable 2 year olds across the Borough.  Children were able to enter pre-school settings the term after their second birthday which meant that some of the children were still very young when they entered settings and this had an impact on the staff ratios and went some way to explain the higher rates.

The Head of Early Years, Schools Standards and Adult Education reported that a benchmarking exercise had been undertaken with neighbouring boroughs and statistical neighbours and this had confirmed that providers in Bromley were receiving a fair deal.

Members of the Schools’ Forum noted the good progress that had been made and expressed their support for the review.

RESOLVED: That the report be noted.