Early Years Funding Update

5th June 2020

Funding for the Summer term

Local Authorities have received funding for the current half term as usual from the Department for Education (DfE) but they are spending it in different ways.

Most Local Authorities are continuing to pay all providers their full entitlement of funding. However, some Local Authorities are withholding a percentage of funding from providers who have not been open, to pay extra to providers who have worked throughout the lockdown period. This is allowed under the current rules because of the exceptional circumstances.

If a parent wishes to move their child’s funding from one setting to another, most Local Authorities are choosing 1 of 3 options, all allowed under current rules:

Double fund the child – the current provider keeps their funding and the new provider also receives funding for the child to cover the remainder of the term.

Moving the funding with the child – this could be problematic if Provider A has received funding for the child but is either not re-opening or is insisting parents choose just one provider – and parents choose Provider B. The funding will need to be paid back or may be withheld from the final payment made to Provider A so it can be passed over to Provider B.

Telling providers to use funding paid for a Child C – who did not attend the setting because either the setting was closed or parents chose not to send the child – to pay for Child D who is moving to the setting. This means that the setting will be expected to register Child D without any additional payments from the Local Authority.

Note: Funding payments for children moving to the setting from elsewhere could take longer than normal to come through due to Local Authority staff working from home. Therefore, our advice is, before agreeing to offer a space to parents, get agreement in writing from your Local Authority about how and when they intend to fund the child’s place.

The current guidance (as at 5th June 2020) states:

‘Any setting which sees their early entitlement funding reduced, in order to fund childcare places elsewhere, may be able to increase the proportion of their salary bill eligible for the Coronavirus Job Retention Scheme.’

Bear this in mind if you have staff on furlough and you have calculated your payments to take account of potentially received funding which has now been reduced. Read more about this.

Funding for Autumn term

DfE have yet to inform Local Authorities how they will pay funding for the Autumn term. This should not, however, affect the way you input funding codes into the portal and you should ask your current parents to renew their funding codes as usual, if their child will continue to receive funding for September.

Any new starters should be encouraged to apply for their funding code as normal, so you have the paperwork ready to input into the portal when it re-opens. There should be a date for this on your Local Authority website. DfE state that this will help to, ‘ensure a smooth transition back into childcare when possible.’

If you do not intend re-opening for funded children in September, you should inform your Local Authority as soon as you have made your final decision, so they can support parents looking for childcare elsewhere. If parents are unsure whether they are going to return in September, DfE advice (as noted above) is to encourage them to get their child’s autumn funding code but do not ask them to sign the funding contract until they have made a final decision.

Funding contracts are legally binding documents so most Local Authorities are requiring providers to get a physical signature on the forms from parents (rather than using digital signatures). This must be done safely, while considering coronavirus, social distancing from parents and the 72 hour life-span of the virus on paper. You might, for example, email the funding contract to parents for them to print out, ask parents to sign the form and return them – and then quarantine the forms in a safe place before opening them to read. You should then follow Government advice to wash your hands after touching documentation from outside sources.

If you have any concerns about funding, you should speak to your Local Authority for clarification in the first instance because every Local Authority deals with funding in slightly different ways. However, if you come across unfair practices, please contact us so they can advise DfE about local issues.

Disclaimer: This information has been researched using latest DfE guidance dated on or before 5th June 2020.  Guidance is changing rapidly and the latest sources of information should always be consulted before final funding decisions are made.

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