EYRG Minutes 17 Jan 2025

Early Years Reference Group Minutes: 17 Jan 2025, 10:00 to 11:30am via Teams

Present

Council

• Kev Taylor - Early Years Funding, Sufficiency and Compliance Lead  (council)

• Rosie Boardman - Improvement and Inclusion Lead for Early Years South (council) 

• Felicity Pepper -  Entitlements Officer (council)

• Karen Winfer - Accountancy Support Team Leader (council)

• Keziah Dewing - Payments Manager (council)

Early Years Sector

• Jayne Waterman - Little People Nursery

• Helen Townsend - Hey Diddle Diddle

• Julie Wetton - Sandytots

• Natasha Richards - Wolstanton Kindergarten/ Cheadle Kindergarten

• Natalie Hart - Greenhall Nursery

• Megan McComiskie - Colwich Preschool

• Sadie Shenton-Jones - Dollymixtures/PVI Rep on Schools Forum

• Sam Nash - Little Owl Childcare

• Rob Lawford - childminder

• Sharon Shilling - Our Pride Our Joy
  
  
• Philip Siddell - Humpty Dumpty / PVI Rep on Schools Forum

• Tim Hopkins -Humpty Dumpty

• Sally Lynch - Oaklands Nursery

• Sharon Keane - Childminder

Guests

• Anthony Humphries - Strategic Finance Business Partner (council)Helen Smith - Corporate Accountant (council)

• Will Wilkes - Corporate Finance Manager (council)

• Luke Rodgers - Senior Corporate Accountant (council)

• Sarah Boyle - Senior Finance Business Partner (council)

Apologies

• Helen Gibson - Early Years Lead (council)

• Sarah McCormick - Little Owl Childcare

• Vicki Green - Childcare Sufficiency Data Officer  (council)

• Megan McComiskie - Colwich Preschool

• Debbie Nash - Family Hub Continuous Improvement Partner (council)

• Jo Di Castiglione - Greenhall Nursery

• Michelle Lindley  - Sandytots

Welcome and Introductions

The focus of the meeting was a workshop to explain the rationale and context to inform the early years funding rates for 2025-26 and also to gain the views of the early years sector to inform the decision making on the rates by Children and Families Senior Leadership Team.

A presentation was shared detailing the breakdown of Government funding to Staffordshire, details of consultations past and present, the Staffordshire funding formulae, rationale, rates and budget and details of the continuing expansion of the childcare entitlements policy introduced by the Government in the Spring Budget 2023

Members of the group raised points for discussion and asked questions:-

One provider asked for clarification of whether they could claim the under 2’s rate for a child who is turning 2 this term. Provided parent has valid code for under 2’s the provider will receive the under 2’s rate until the term after the child’s second birthday.

The rep from Schools Forum asked for the following points which had previously been minuted at Schools Forum meeting held on 14 November 2024 to be included in the minutes:- 

‘The October Budget will mean cost increases for nurseries of between 8.5% and 9.0%. This is chiefly because of a 6.7% increase in the National Living Wage for anyone 21 and over and 16.3% to 18.0% for younger employees. In addition, there is a massive increase in the employer’s National Insurance contribution for all employees in the region of 50% meaning a typical overall increase in wage cost much larger than the statutory wage increases. In fact, up to 33% of the actual wage cost increase will be as a result of the employer’s National Insurance changes in the October Budget.

Given that a typical nursery’s wage cost represents 75% of its total costs and that all other costs have been increasing substantially including food, energy, insurance and all other consumables and that nurseries, unlike schools, have to pay ever increasing business rates, property costs and VAT on purchases, it is not difficult to see how fees will inevitably have to increase substantially.

Staffordshire County Council are considered by local private nursery providers, who represent around 70% of Childcare and Early Education provision, to be one of the best, if not the best Local Authority in the country in terms of working relationship with nursery providers. However, the level of funding provided to them by Government has typically fallen short of the real cost by between 25% to 30% for three and four-year-olds over the last decade.

Indeed, the increase in the Government funding rate made available last year was only half of the actual increase in costs faced by nurseries, perversely only widening the funding gap!

All nurseries have only two sources of income: fees paid by parents and funding from Government. By September 2025 it is estimated that 80% of provision will be Government funded. Government itself, after many years of calling their involvement “free” to parents, have now changed this description to “funded” in line with their acknowledgement that not all costs are covered by them. The inescapable reality is that if funding continues to fall short and all cost increases, including the employer’s National Insurance changes are not taken into account, then fees to parents will inevitably have to increase to cover costs.’

Rosie Boardman shared that Staffordshire County Council  continue to meet regularly with Department for Education  to feedback comments and share challenges faced by the sector. 

One childminder shared that the majority of her parents take the funded hours only and there is no opportunity for additional income from hours that are not government funded. It forces her to on occasion make a financial decision instead of prioritising the needs of the child.

One provider shared that the recent Government media push to replace the word ‘free’ with ‘funded’ was welcomed; however, the same message is not consistent across other Government departments and agencies who deal with parents directly such as Department for Work and Pensions , His Majesty’s Revenue and Customs  and Universal Credit, resulting in confusion for parents and providers.

Kev Taylor shared that this has previously been fed back to the DfE by email and in a meeting.

One provider asked whether schools get employer National Insurancecontributions reimbursed and does this include their nurseries.? What about Private, Voluntary and Independent sector?

Another provider responded by saying that Private, Voluntary and Independent sector do not get assistance on employers National Insurance creating a 2 tier system. 

Anthony Humphries raised the point that:

‘Local Authority (Capital Finance and Accounting) (England) (Amendment) Regulations 2020 (updated 2022) set statutory rules for how a Dedicated Schools Grant deficit is to be calculated and that the whole of it is to be put in an unusable reserve. The definition of how the deficit is to be calculated includes any surplus from previous years. Separate reserves with surpluses in them cannot be held.’

This means that there is no separate surplus balance for Early Years within this reserve.

Next steps: These discussions and the views captured from the sector will be shared with the Senior Leadership Team who will make a final decision on early years rates for 25-26 in early February. A paper will follow to the Schools Forum. Once the rate has been agreed this will be communicated to all providers in a letter by email, through the Early Years Portal and on the e-newsletter by the 28^th February. Providers will receive their individual statements by email by the 28^th February 2025. 

Rosie Boardman and Kev Taylor thanked the sector representatives for their time and contributions and the Finance team for preparing such a detailed presentation for the groups consideration and questions. Anthony Humphries also extended his thanks to Keziah Dewing and her Early Years Finance Team for making the payments to early years providers.