Last reviewed 12 March 2018

The Government’s latest childcare programme was launched at the beginning of September 2017. Liz Hodgman, Childcare Consultant, reviews the progress of the extended entitlement and offers some ideas for providers to help make the scheme sustainable for their business.

Background

Thirty hours was a regular news item during the build up to the launch with a significant number of parents experiencing problems with HM Revenue & Customs (HMRC) website and concerns regarding funding rates. The success of the scheme relied heavily in many areas of the country on private, voluntary and independent providers, and childminders engaging with it and making free offers available to parents. With the sudden and unexpected announcement of the summer general election, preparations for the launch were stalled as the Government and local authorities (LAs) entered a period of purdah. As a result, there was no national marketing campaign of the 30-hour offer.

The current situation

Despite all the difficulties, government figures estimate that 202,800 children were in 30-hour places during the autumn term. The Government has published data based on the first term (September–December 2017) collated from LAs. Of the 224,885 codes issued, 94% were validated by providers and 90% of children in places.

The Department for Education (DfE) has provided a funding pot of £8.65 million. This Delivery Support Fund (DSF) is intended to support LAs and childcare providers across the country to meet the demands of the Summer Term 2018 as the number of eligible children will be at its highest for the year. Each LA was invited to bid for funding and projects which could include sufficiency mapping, IT support, supporting children with special educational needs and disability (SEND) and provider sustainability. Bids had to be submitted in December and were being assessed by the DfE during January. LAs will be informed if their bid projects have been successful and funding will be made available in March. All the projects are short term as all the funding must be spent by the end of August 2018.

LAs were able to make a bid for up to £10,000 for small capital projects for providers.

LAs should be informing local providers if their bids have been successful and what this might mean to them. For example, they may be providing one-to-one sustainability and business support for providers or additional SEND training.

Making 30 hours work for your provision

It is vital that the offering of 30-hour places does not have a negative impact on the long-term sustainability of your provision. Using the basic requirements of the funded offer (from the Statutory Guidance), you can calculate rates that will ensure that you continue to cover your costs.

The offer must:

  • provide the hours completely free

  • be clearly defined in your admissions policy

  • not net off the funding from your normal charges.

Providers are now able to make charges for consumable and additional hours.

This is an example of how you can make the funding work within the guidance (you will need to adjust the rates according to your own hourly rate and LA funding rate).

Normal rate

Standard daily rate £50

Funded hourly rate paid by LA

 £4 per hour

Free hours available between 8am and 2pm (universal and 30 hours)

Daily rate with six hours funded

Daily rate with five hours funded

£27

£31

Charge for consumables

 £6 per day

Charge a higher hourly rate for early and late pick ups (that are excluded from the free offer)

 £7 per hour for 7am–8am and 6pm–7pm

Ensure that what is included in the daily consumables rate is clearly listed within your admissions policy and that parents do not have to pay this rate if they are only accessing their free hours. They can provide the consumable themselves.

Consumables could include:

  • healthy breakfast, lunch, tea and snacks

  • nappies and wipes

  • trips

  • other additional services.

It is important that when you invoice parents, you are not netting off the funding received from the LA. The invoices must be clear for all to understand, show the funded hours the child has accessed and any charges for additional hours booked or consumables.

Using the above funding example, Amy Smith is attending five days a week from 8am until 6pm.

She is accessing her full 15 hours universal and 15 hours extended entitlement between 8am–2pm each day and her parents are purchasing the additional hours. Her mum does not want to have to prepare all her meals and bring them so she is happy to pay the daily consumables rate.

Her invoice for a week will look like this:

Invoice for week commencing xxx

Hours and rates

Total Charge

Amy Smith

15 hours universal

15 hours extended entitlement

Daily rate with 6 hours funded (£27) x 5 days

5 x consumables £6 per day

£135

 £30

Total Due

£165

For your provision, the income you will receive will be:

15 hours universal x £4 ph

 £60

15 hours extended x £4 ph

 £60

Daily rate with 6 hours funded £27 x 5 days

£135

Consumables £6 x 5 days

 £30

Total

£285

The provision’s rate for a full week with no funding would cost £250 so you are more than covering your costs. The parent is also making savings by taking up the funding.

If Amy’s mum informs you that she is going to bring in all Amy’s food and she is now toilet trained then the consumables rate would not be charged. This would reduce the invoice to £135 per week.

If Amy’s mum informs you that she needs to start work earlier and wants to drop her at 7am then you add on the additional hour at the higher rate of £7 per hour.

The small increase in income from this example will help to offset the loss you may make on another child who takes her full 30 hours as free and free only. 8am–2pm each day (you are losing £1 per hour funded rate to your normal hourly rate).

You might also consider stretched offers, spreading the free hours over the whole year rather than term time only. If children only access the provision during term time for their free places then consider offering their holiday places to siblings of full-time children as a holiday provision. This will help to increase income and maintain capacity levels.

Ensure that your setting’s website information on 30 hours is up to date and clearly visible. Have you used your social media account to share information on 30 hours with parents? Adding a link within your setting’s promotional materials to Childcare Choices will help parents to look at all the funding support available to them.

It is really important that you remind parents to reconfirm their information with HMRC to avoid falling into the grace period. Although HMRC will email to remind parents you can set up a simple diary system to send out text alerts or hand out a paper note to parents to remind them.

Ensure that details are entered accurately into the eligibility code checker that your LA is using. Often dates of birth are entered wrongly and this can delay checking validity.

Make sure you are claiming for all the funding that your setting is entitled to. This will include the disability access fund (DAF), early years pupil premium (EYPP) and the inclusion fund for children with low level and emerging needs.

Reception children

It is too early in the programme to see if the introduction of the extended entitlement has impacted on the uptake of Reception places. The Government has reported that there were 8022 codes issued to children aged 4 at 31 August and of these, 3664 codes were validated by providers. Parents may choose to keep their child within an early years setting rather than take up a Reception place and the 30-hour extended entitlement now means that this can be funded.

For provisions with children who would normally be in Reception, they must make additional provision. The child’s keyworker will need to track their progress and ensure that their learning and development is being extended according to their ability, this may be beyond the early learning goals. They will need to find out what school the child will be entering for Year 1 and liaise with them regarding the transition. They will also need to contact their Local Authority School Standard Team to discuss the child’s EYFS profile and what moderation is in place for this. Practitioners may be able to attend local training on completing the profile. More details on this can be found at www.gov.uk.

The future of 30 hours

The Government’s Treasury Committee has recently launched an inquiry into the Childcare Policy. This cross-party committee of MPs is chaired by Nicky Morgan, former Education Secretary. They will be looking at the impact of 30 hours and Tax Free Childcare on supporting parents into employment and the labour market. The committee will look at take up and funding rates, issues with the HMRC computer systems and sufficiency of places.

The results of this inquiry may have an impact on the future delivery and funding of 30 hours.