Agenda item

To approve both the increase of the Two-Year-old hourly rate from £5.38 to £5.59 and the increase of the Three and Four-year-old hourly rate from £4.06 to £4.23.

The Forum received a report which informed Members of the outcome of the consultation on the increase to the hourly rates for two year olds; and three and four old for the financial year 2022/23.

On 27 October 2021, the Chancellor had announced that the Government would invest additional funding for the early years entitlements for two, three and four year olds worth £160m in 2022 2023, £180m in 2023 - 2024 and £170m in 2024 - 2025, compared to the current year. This was for local authorities to increase hourly rates paid to early years providers for the Government’s free childcare entitlement offers and reflected cost pressures, as well as anticipated changes in the number of eligible children. On the 25 November 2021 individual local authority rates had been published by the DfE.

The Education and Skills Agency (ESFA) issued in December 2021 the “Early years entitlements: local authority funding of providers – Operational guide 2022 to 2023”.

The guide had been issued to help local authorities follow the rules and principles when funding providers to deliver the early years entitlements in the financial year 2022 to 2023 as well as describing the basis of funding to local authorities.

Local authorities were required to consult providers on annual changes to their local formula.

The early years national funding formula hourly rates had increased by £0.21 per hour for two year olds and £0.17 per hour for three and four year olds.

On 1 February 2022 the Quality Early Years and Child Care Team had sent out the following consultation via email to 90 Day Care Providers and 99 Child Minders as they were providers who delivered the Two Year Old funding and the Nursery Education Funding in Sandwell’s Private Voluntary and Independent child care sector. The survey had also been sent to all Primary and Infant Schools.

On 27 October 2021, the Chancellor had announced that the Government would invest additional funding for the early years entitlements for two, three and four year olds worth £160m in 2022 2023, £180m in 2023 - 2024 and £170m in 2024 - 2025, compared to the current year. This was for local authorities to increase hourly rates paid to early years providers for the Government’s free childcare entitlement offers and reflects cost pressures, as well as anticipated changes in the number of eligible children. On the 25 November 2021 individual local authority rates had been published by the DfE.

The Council was now consulting on the proposed funding increase for the financial year 2022 - 2023. To enable all providers who delivered on the early years entitlements to benefit from the increased funding, Sandwell MBC was proposing to use all of the additional funding to increase the basic hourly rate of pay for two-year olds and three and four-year olds and keep the additional payments of the single funding formula at the same rate as 2021 - 2022.

The proposed funding structure was as set out below: -

The following question was consulted on:

“Do you agree that Sandwell Council should use the additional Early Years funding to increase the basic rate of funding for two-year olds and three and four year olds?”

The results of the survey were as follows:

Total responses = 40.

The response to the 2 central questions:

The 1 response of ‘No’ had come from:

·      1 Child Minder who had left no further comment.

The survey had also invited suggestions, comments or any questions providers might have with regards to the increase in Early Years funding. The following responses were from providers who had voted ‘yes’ in the consultation, but also commented;

·      Hopefully more face to face training sessions – Day care Provider

·      It is essential for our nursery's survival that the hourly rate for funded children increases. We are really struggling and with the living wage increasing each April we are not sure how much longer we will be able to continue. Since the introduction of ELT and 30 hours we hardly have any paid places so are relying on being provided with a realistic hourly rate in relation to inflation and living wage increases to survive. – Day Care Provider

·      This increase in hourly rate will really help towards the rising costs of providing nursery education. Day Care Provider

·      What would the additional money be spent on if it wasn't used to increase the basic rate? School. Response provided by email.

·      Is this on top of the annual increase we would have received anyway? School. Response and clarification sent via email.

·      "If there were any grants available for capital projects, we would be very interested in this. We would like to revamp the play areas for our nursery children but simply do not have the funds because we only really break even (at best) due to the cost of staffing. The increase to hourly rate will support with this but at the same time, we are anticipating a big hike in cost of staffing due to NI increase and proposed increase to public sector pay.

·      Further to this, we are under great pressure in terms of our 2 year old setting. Numbers are low and staffing costs are increasing. We really want to continue offering 2 year old places but any support (either financial or otherwise) in this area would be very welcome." School. Response provided by email.

·      Welcomed! If we get it right at the start, less should be needed further down the line! School

Resolved (unanimously amongst School Members on the Forum) that: -

1. the increase of the Two-Year-old hourly rate from £5.38 to £5.59 be approved;

2. the increase of the Three and Four-year-old hourly rate from £4.06 to £4.23 be approved.