Local authorities leave nurseries out of pocket on two-year-olds costs

Research by the Free Childcare campaign found that nurseries are concerned about how the scheme will work when it is extended throughout England.

Some of the 650 respondents to the survey said that local authorities are 'disorganised' and 'not in possession of the full facts' when it comes to rolling out the pilot scheme nationally.

Kate Peach, who started the Free Childcare campaign and who has recently launched Peacharno Consulting, said the survey was carried out 'because it was particularly apparent from discussions with providers that, although there was a general feeling that the hourly rate was somewhat adequate, children in the pilot had complicated additional needs, challenges with language and complicated family situations.'

The survey found that three-quarters of providers taking part in the pilot had fewer than ten two-year-olds and the majority of nurseries said they had fewer than five eligible children (64 per cent) in the pilot.

However, despite the relatively small numbers of children involved at each nursery, findings from the pilot suggest that some nurseries may be reluctant to take part in the scheme as it expands, which could lead to a shortage of two-year-old places.

Some of the settings surveyed said they had incurred extra costs in offering the free places above the funding they receive, simply because these places are for the most disadvantaged children.

Although few two-year-olds had been formally diagnosed with special educational needs, nearly three-quarters of respondents said that two-year-olds in the pilot had additional needs, such as complex family problems, emotional and behavioural issues, and delayed speech and language.

When asked for further details, nurseries reported having to spend money on bringing in extra staff and resources.

However, the survey also found that most providers (43 per cent) felt that the rate of funding for two-year-olds, which in pilot areas is higher than that for threeand four-year-olds, was 'somewhat adequate'.

Other key findings from settings offering places for two-year-olds include:

• 33 per cent received £4 to £4.49 per child per hour

• 13 per cent received £5 to £5.49 per hour

• 43 per cent of children in the pilot scheme had SEN

• 71 per cent of two-year-olds had additional needs or requirements.

Ms Peach said that often, nursery managers and children's key workers were having to attend case conferences and meetings with social workers.

Meetings with external agencies were taking staff out of the nursery and settings were having to pay for cover, she said, which was not being reimbursed by local authorities, despite the fact that local authorities have an obligation to provide funding for additional support and special educational needs.

Ms Peach warned this could impact significantly on overall numbers for two-year-old places when the scheme is rolled out nationwide, with some eligible children struggling to find places.

She also said that she had been told by some nurseries in the pilot that, 'having done it, it's not financially viable, so they're simply not going to do it.'

Currently, nurseries have no specific obligation to provide places for two-year-olds.

Ms Peach said that providers who did not want to offer two-year-old places because they are worried about the cost of providing care for children with additional needs could withdraw from the pilot, without affecting their occupancy levels, because in reality the number of eligible two-year-old places for many private nurseries would be quite small.

'As the scheme is only initially rolled out to the 20 per cent most disadvantaged children, there is no specific obligation for nurseries to provide those places.'

Ms Peach said that some providers are worried that the funding for two-year-olds will end up with the same problems as the longstanding issues with the free entitlement funding for threeand four-year-olds - that there will be shortfalls in funding for providers and they will not be able to cover their costs.

WHAT THE NURSERIES SAY

- Do you believe the rate you receive is adequate?

The funding covers the amount of one of our 2.5-hour sessions but leaves little to buy more resources for this age and staffing ratios.

The children placed in this scheme often require additional support relating to social and emotional development, behaviour and language and communication skills, which can mean one-to-one for most of their time in nursery. The tracking required by the LA early years team to monitor progress is additional to the observation and assessment used to compile children's learning journeys, so therefore requires more time from key workers.

It does not go anywhere near covering our costs.

For this child no additional training or case meetings were needed so the child did not cost more than the normal hourly rate.

They never ask what our hourly rate is, they seem to pick a number out of thin air and go with that.

- Do any children have special educational needs? What additional resources have you had to provide?

As the children in the pilot scheme are "in need", they all have additional needs, some of which are severe - action plus or en route to statementing.

Meetings, case conferences, hospital appointments.

One-to-one support, but this was funded separately by the local authority.

Speech and language, orthopaedic, sign language, OT, extra equipment, e.g. puzzles, maths resources, exercise equipment.

Have you experienced any additional needs outside SEN?

Complicated family issues, which tie up staff for long periods of time supporting parents.

Most have experienced early trauma, as part of their families' complex situations.

Children are frequently below the expected level of development.

Child protection, child in need, autistic behaviour, second and additional language, hearing impaired, traveller families, substance abuse, domestic violence, divorce and court orders.

CCS referrals generally entail family support over and above the needs of most families, incurring additional staff costs, during sessions and review meetings

- What other resources have you supplied beyond your standard offering for two-year-olds?

We've had to introduce a lot more two-year-old activities, and review staff due to the change in ratios.

Complete re-organisation of provision to support mainly two-year-olds in a room which caters for twoto five-year-olds.

OTHER COMMENTS

Ninety per cent of two-year-olds on the scheme are below national expectations of development in the EYFS when they come to us, but all make progress in their year with us provided their attendance is more than 80 per cent.

The funding does not cover our day nursery hourly rate. The use of hours is not flexible enough for when parents require it.

The council totally underestimates how much it costs to run and staff the nursery. If the funding was expanded to cover all two-year-olds we would go out of business.

The two-year-old funding has had a positive impact on children and families but it takes a lot of time and form-filling before a parent gets it.

Our two-year-olds have benefited considerably. Some had little or no speech and it is wonderful to see them progress.