Extension to free entitlement funding

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There are two new developments in the delivery of the Free Entitlement that providers and parents need to be aware of.

The government announced in June 2007 that the arrangements for funding early years provision were to be reviewed and each local authority had to develop a new Single Formula for funding all providers. In Wiltshire this came into effect in April 2010. The new funding arrangements were to accommodate the second of these developments which was parents’ entitlement of the new extended flexible offer of 15 hours of free nursery education over a minimum of 38 weeks per year; a total maximum entitlement of 570 hours each year.

Decision making about Early Years Funding (free entitlement)

In 2007 Wiltshire brought together a representative group of stakeholder members to consider all early years funding issues in response to these Government plans to introduce Nursery Education Funding reform. This is known as the Early Years Reference Group whose role is to advise the council on the development and implementation of policies relating to the provision of nursery education and childcare.

What is the Extended Offer?

The New Extended Offer, available to all parents since September 2010, is for –

• up to 15 hours a week over 38 weeks a year, up to a maximum of 570 hours each year. Parents may reduce the hours taken per week by extending their claim over more weeks
• to be delivered flexibly by providers, ideally at any time of day that a provider is open
• available for 2.5 - 10 hours in any one day
• available to all three and four year olds from September 2010 whose parents wish to access the extended offer, subject to providers being able and willing to accommodate parental needs.

Further details about the extended offer are detailed in Wiltshire’s Local Code of Practice which will shortly be available on-line.

If you would like to obtain more information about the extended flexible offer from official DfE publications, these can be found on the Government’s website

Single Funding Formula

The government stated in 2007 that the development of a single formula for paying free entitlement to providers must:

• support effective and efficient distribution of resources at a local level;
• facilitate greater flexibility of provision so that parents have greater choice in how they use their free entitlement;
• preserve diversity and choice in the market;
• incentivise improvements in the quality of provision.

Single Funding Formula guidance has been developed nationally to develop a scheme to pay all providers on an equitable basis.

In Wiltshire we needed to develop a single funding formula because

• We had a mixed market and there were inconsistencies in how maintained and Private, Voluntary and Independent (PVI) settings were funded
• place-led funding in maintained settings meant there was little incentive for these providers to encourage take-up of the full entitlement
• the PVI sector was often funded on a flat rate and the Local Authority could not guarantee getting value for money or funding the entitlement properly
• extensive instability in PVI budgets could often undermine quality and sustainability.

In Autumn 2009, a cost survey was carried out with all providers in Wiltshire and a more detailed analysis of the cost of delivering nursery education took place in Spring 2010 using a smaller range of providers from different parts of the sector. From this, the Early Years Reference Group looked at developing a formula which introduced a basic hourly rate for each type of provider with the option of adding supplements for factors such as deprivation, quality, rurality, variations in ratios and Special Educational Needs.

In Wiltshire, this came into effect from April 2010 which now enables the Local Authority to pay all Wiltshire providers, including its 11 maintained nurseries, on the number of hours actually provided to eligible children.

If you would like to obtain more information about early years funding reform from official DfE publications, these can be found at on the Government’s website

Funding briefings and newsletters for Providers

The Early Years & Childcare Team has run a large number of briefing sessions with providers to keep them informed about these developments and has also produced a number of Early Years Funding Newsletters which can viewed here

• Early years funding newsletter - May 2009 Early years funding newsletter - May 2009 35kb
• Early years funding newsletter - June 2009 Early years funding newsletter - June 2009 29kb
• Early years funding newsletter - July 2009 Early years funding newsletter - July 2009 37kb
• Early years funding newsletter - March 2010 Early years funding newsletter - March 2010 37kb

Last updated: 28 October 2010