7.1 The Head of Early Years presented a report which set out the Early Years context in Gloucestershire, the proposed distribution of the hourly rate increases for 2023/24, and provided options for how the carried forward balances could be best used.
7.2 The Head of Early Years explained that the proposal was for the entire hourly rate increase to be passed through to providers and for a consultation to be undertaken with providers on a number of options in respect of the Early Years formula, including deprivation payments for 3 and 4-year-olds.
7.3 The local authority’s recommendation to pass the entire hourly rate increase to providers, rather than to retain an element of funding for central services, was due to the last two years being particularly challenging for the sector. The sector had been significantly affected by the long-term impact of the Covid pandemic. The difficulties surrounding the introduction of the 30 hours funded childcare offer from government, and staffing and business sustainability, had all increased in recent times.
7.4 It was evident from recent discussions with providers that even with the increase in hourly rates passed through for distribution, there would still be a number of settings with significant budget deficits due to increases in overheads and staff wages.
7.5 It was reported that the rising costs and the low hourly childcare rate had led to nurseries struggling to ensure long term sustainability. This was resulting in an increase in the number of settings closing or reporting that they were at risk of closure. This was a national issue affecting all local authorities.
7.6 In response to a question, the Head of Early Years explained that the Early Years Alliance, a national body representing the sector, undertakes lobbying and campaigning work on key areas of concern, including the level of hourly funding rates.
7.7 One member requested information on the number of settings closing in Gloucestershire. She pointed out that the rise in the number of private settings closing, was increasing the pressure on budgets of primary maintained schools with school nurseries attached, as demand for places grew without sufficient funding to meet need. She was concerned that this may develop into a significant issue, and suggested it may need to be identified by the f40 group as an area of focus within its campaign work.
7.8 The Head of Early Years explained that the Gloucestershire Childcare Sufficiency Duty report, published on the Council’s website, contained information on the number of settings in the county and the closures between the period June 2021 – June 2022. An interim sufficiency report which would detail this information for the period between June 2022 and December 2022 was due to be published at the end of January 2023. Web-links to the reports would be circulated to members.
ACTION: Head of Early Years.
7.9 Members were informed that the recent sufficiency assessment had identified that whilst the number of providers in the county was reducing, the number of places was increasing. There was sufficient provision to meet the needs of children requiring childcare in most parts of the county. A Forum member emphasised that the local authority needed to be aware that it was maintained primary schools with a nursery school attached, that were providing those additional places, and the concern was whether the schools would be able to sustain this long-term.
7.10 The Head of Early Years reported that Gloucestershire currently had Early Years DSG carry forward balances from 2021/22 available of £1.348M. The Forum was informed of the in-year balance options for Early Years.
7.11 Having considered all of the information presented, the Forum agreed that:
1. The full hourly rate increases be passed to providers and that the Early Years Forum would confirm the preferred option for distribution.
2. The total uncommitted Early Years carry forward balance from 2021/22 of £1.348M, could be used as follows:
Ø Retain £200k (15%) of the underspend to support Early Education & childcare sufficiency (capital and revenue).
Ø Retain £100k (7%) to fund up to 6 months extension of the commissioned EY Specialist Assessment provision for children with special educational needs.
Ø Retain £200k (15%) for contingency.
Ø Allocate £848k (63%) to providers proportionately, based on the full academic year hours 2021/22.