Decision details

(TAKE IN REPORT)

Councillor Young advised that as a deputation request had been made on Agenda item 6, he would be revising the order of the agenda today and would hear this item first. He invited Richard Webb, Finance Manager to introduce the report.  Councillor Young then invited Ms Kara Jewell to make her deputation.  Ms Jewell was speaking on behalf of the Portsmouth Funding Forum which is made up of a group of Early Years Providers.  The main points were as follows:

·         The providers acknowledged that the base rate has increased by 8% which is a step in the right direction however unfortunately this is leaving many providers with a shortfall on the delivery of early years places. 

·         The new national funding rate is not set to be reviewed until the next spending review in 3-5 years with no guarantee of further increase at that point.

·         During the recent additional 15 hour trial in Portsmouth, providers are receiving £4.88 an hour per child - so the new rate would be a drop of 16%.

·         No plans for any incremental increases to the base rate in line with inflation. Business rates are also increasing dramatically so it is paramount that the highest possible base rates are secured for all providers to protect them for additional increases in the coming years.

·         Providers are clear that if funding rates fall below an acceptable level the quality of care and outcomes for children will be affected.

·         The Forum felt there is scope to look at the amount of deprivation being withheld and asked whether there was scope to eliminate the bands of deprivation and give all providers a flat rate included in their base.

·         Providers feel that the quality of care they deliver is of the same standards regardless of whether a child in their setting is from an area of deprivation or not.

·         The Government has said providers can charge for additional services such as food and in reality some providers will choose the families who can afford to pay for extra items as opposed to those who cannot to make up the deficit that funded places causes.  This will create a two tier system.

Councillor Young thanked Ms Jewell for her deputation.  He referred to the point raised in the deputation regarding the deprivation and asked officers whether there was any way this could be reviewed, although was conscious that local authorities must work within the funding set by the Government.  Richard Webb referred to the table in 5.23 showing the 2017-18 deprivation rates which were proposed to be maintained from the previous funding formula and explained that the decision to retain this arrangement was based on feedback from the consultation with providers.  The DfE have stated that it is mandatory to have a deprivation factor.  Consideration was given to changing the deprivation formula from a pupil-led formula to one based on the location of the early years setting. Based on the feedback from the consultation with providers (90% of respondents wanted to keep the existing formula) and the financial modelling it was decided to retain the existing formula.

In response to a follow up question from Councillor Young, Richard Webb said he was happy to review the local funding formula again as part of the budget setting process for 2018-19 and any changes will depend of the demand on the growth and inclusion funds; and will need to remain affordable within the funding provided by the DfE. Councillor Young felt this was a sensible solution.  The DfE have said they do not expect to change the formula until the next comprehensive spending review.

Alison Jeffery, Director of Children's Services, suggested to the Cabinet Member that he could formally write to the DfE to draw their attention to the concerns of some providers that the move to 30 funded hours, at the funding level proposed nationally, may reduce opportunities for cross subsidy which have benefitted providers in the past; and the need to keep under review the financial viability of sufficient provision to meet the needs of the city.  Councillor Young said he was happy to do this and that he would like officers to explore options available to the Council to support providers by mitigating where possible the increases in the provider cost base.

Councillor Young said he would like to amend the recommendations to take into account these points to look at other ways of supporting providers moving forward.


DECISIONS: The Cabinet Member:

a.         Noted the changes made by the Department for Education to the Early Years national funding formula, following the results of the national consultation which closed on 22 September 2016, as summarised within this report.

b.        Noted the results of the local consultation with early years providers as set out in Appendix 1.

c.         Approved the proposed local early years funding formula for 3 and 4 year olds, as set out within this report and agreed that this should be reviewed as part of the budget setting process for 2018-19; with recognition of the hourly funding rate provided by the DfE.

d.        Approved the proposed changes to the local 2 year old funding arrangements for 2017-18 as set out within the report.

e.         Noted the work being undertaken by the Early Years Team to ensure providers are aware of potential future levels of funding, and to help providers develop their service provision to enable them to mitigate the impact of any potential reductions in funding.

f.          Approved the funding held centrally to support the determination of the eligibility of early years pupils for prescribed early years provision, early years pupil premium and free schools meals.

g.        Approved the proposed changes to the Dedicated Schools Grant Budget for 2017-18 as set out in Appendix 3.

h.        Agreed that a representation be made by the Council to the DfE, to draw their attention to the concerns of some providers that the move to 30 funded hours, at the funding level proposed nationally, may reduce opportunities for cross subsidy which have benefitted providers in the past; and the need to keep under review the financial viability of sufficient provision to meet the needs of the city.

i.          Agreed that the Council will explore the options available to it for supporting providers, by mitigating where possible, the increases in the provider cost base.