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Updated DfE guidance says that local authorities can “move around” funding

By Rachel Lawler

Updated guidance from the Department for Education (DfE) says that local authorities will be able to “move around government funding for free childcare entitlements in exceptional circumstances” to ensure that there are “sufficient childcare places” for vulnerable children and key worker families.

The DfE says that local authorities can “redistribute” the funding when “absolutely necessary” to benefit vulnerable children and key worker families.

The update comes weeks after the government advised providers that they would still be able to access funding for the 15 and 30 hours schemes during closures. On 17 March, the DfE announced that nurseries, pre-school and childminders in England would still be able to receive ‘free entitlement’ funding for children not able to attend settings as normal during this period.

However, this new guidance seems to contradict the previous statements.

The revised DfE guidance goes on to state that: “Any setting which sees their early entitlement funding reduced in order to fund childcare places elsewhere will be able to increase the proportion of their salary bill eligible for the Coronavirus Job Retention Scheme in line with the Department’s guidance on access to the scheme.”

Reduced funding 
The Alliance has already received a number of reports from providers whose local authorities are reducing the level of funding being given to settings who are temporarily closed, in order to offer additional funding support to those who are open to key worker families and vulnerable children.

Local authorities will be given further guidance on the steps they must take if moving funding between settings.

Unprecedented challenges
Vicky Ford, children and families minister, said: “Our early years professionals are central to this country’s response to the coronavirus outbreak, and I’m grateful for their work to continue providing safe and high-quality childcare for those who need it the most: critical workers and parents of vulnerable children.

“Councils are best placed to respond to the childcare needs in their area, so it’s right that we give them extra support to face these unprecedented challenges. They can use flexibility to redistribute entitlements funding in exceptional cases where other options have been exhausted, helping nurseries and other settings stay open and making sure enough childcare places are available.”

Alliance concerns
Neil Leitch, chief executive of Early Years Alliance, said: “It is absolutely unacceptable for the government to continually move the goalposts for the early years sector at the last minute.  

“The DfE explicitly stated weeks ago that it expected local authorities to pass on early entitlement funding ‘as normal’ to all childcare providers, and nurseries, pre-schools and childminders will have rightly budgeted on this basis.

“While we of course recognise the desire of government and local authorities to do all they can to support providers to stay open for key worker families and vulnerable children, this should not be at the expense of providers who have closed, given that many have had no choice but to take the difficult decision to do so.

“While the government says that providers set to lose ‘free entitlement’ funding as a result of this change can now benefit more from the Job Retention Scheme, this isn’t an even trade as support via the Job Retention Scheme only applies to a provider’s wage bill and is capped at 80%.

“With many settings still reeling from the government's U-turn on Friday, this latest change is just another blow to a sector doing its best to support local families however they can in incredibly difficult circumstances.

“Once again, we urge the government to rethink this decision and urge that all providers are able to access the support they were originally promised”.

Find out more
Read the guidance in full
Alliance slams U-turn on furlough scheme

Business Advice page: FAQs for providers

Blog: Quick Q and A: Job Retention Scheme and early years entitlement funding