Private and voluntary nurseries lose out on nursery funding, new survey finds

The introduction of the Early Years Single Funding Formula (EYSFF) in April was intended to remove discrepancies in funding between the private, voluntary and maintained sectors.

But NDNA’s survey of nurseries in 133 local authorities in England found that the EYSFF is failing to deliver consistent levels of funding for PVI nurseries and that the ‘base rate’ - the minimum nurseries receive from local authorities for providing free entitlement places -  varies widely throughout the country.

As an overall average, nurseries in the private sector were being paid a base rate of £3.51 per child per hour, compared to £3.55 for voluntary nurseries and £3.96 for maintained settings.  
The lowest base rate was found in North Tyneside, where private nurseries receive just £2.05 an hour compared with the highest base rate found of £5 an hour in Slough.

There are also wide variations between nurseries in neighbouring areas. Nurseries in Leeds, for example, receive a minimum of £3.70 an hour, while those in Bradford receive £4.63 an hour.

Other key findings from the research are:

• approaches to supplements varied, with supplements for quality and flexibility being given most by local authorities. If all supplements applied, the average amount of potential additional funding was 84p per child per hour

• nurseries piloting free places for disadvantaged two-year-olds in the majority of cases received between £4.85 and £6.00 per child per hour. But NDNA said these figures were obtained prior to money for places for disadvantaged two-year-olds being included within the Early Intervention Grant.

Purnima Tanuku, chief executive of the NDNA, said, ‘A significant proportion of nursery members have been reporting that the Early Years Single Funding Formula is not delivering a rate that is more reflective of their costs.

This research has also shown the significant variations in the levels of funding nurseries are receiving. A proportion of nurseries are receiving a healthy rate of funding, with possible additional support from various supplements.

‘The lowest base rate we found was £2.05 per child per hour – around the average cost of a pint of milk and a loaf of bread. Although a range of supplements may be accessible to settings, in practice they may only add a small amount of additional funding and do not always incentivise and reward quality and flexibility.

‘With over half of the free nursery education children receive being provided by private and voluntary nurseries, this research shows that the EYSFF is not delivering the consistency in funding needed by the sector. A new system of funding with binding national criteria would help address these issues.’

The Government’s review of school funding was an opportunity to improve the way early education is funded, Ms Tanuku added.

• See the full story in Nursery World magazine, published on 14 June.