CEY0021

Written evidence submitted by Manor Nursery School Ltd

I am the registered provider of an 80 place setting in Blackpool, established in 1993.

For over twenty Years I have been a Representative to the Local Authority for the Private, Voluntary and Independent Early Years Education sector.

Along with three of my colleagues we represent over forty settings in the area on the Local Authority Strategic Group. Our remit is to advise on providing ample sustainable provision with adequate  parental choice.

The following observations are based on my own findings, those of my colleagues locally that I represent and Nationally from comments, many posted on social media, that demonstrate a frustration amongst Providers that Grant Funding is so insufficient that it is destroying Early Years Provision on a devastating scale with the closure of settings becoming more and more prevalent.

Worst case scenario.

If all P.V.I. Settings were to close en masse due to lack of funding, Local Authorities could not provide cover with immediate effect to service the needs of all children under the terms we work with at present, i.e. Inclusion, parental choice etc.

Local Authorities could not in an immediate time scale arrange capital funding, apply for planning consents, arrange building contracts, build units and then source sufficient staff.

This process could take up to three years (looking at the time scales of other Local Authority projects).

Three years would mean that a whole generation of children would miss out on Early Years Education during that period before starting school putting them at severe disadvantage.

It is therefore imperative that the current position of the P.V.I supplying the majority of Early Years Education, Nationally, be maintained.

Location

My setting is situated with a catchment area of a large Council Estate, most of the children being on Grant only 15 or 30 hrs provision.

Grant funding attributes for 60% of my settings income.

Early Years Education Grant for 3-4 Year olds.

The Grant was established in 1997 at the rate of £2.97p ph. The current rate in Blackpool is £4.39 a rise of 41% over a 25 year period.

Under the terms of our registration agreement we are required to observe the INCLUSION POLICY, taking some children with complex needs for which we receive no extra funding.

The Government has always assumed that any shortfall in Grant Funding will be made up from other funding that settings earn, i.e extra hours taken over and above funding or children who are paid for without any funding.

This theory diminishes the income source of most settings.

Employment

Staffing costs account for 55% of total turnover.

Due to income restrictions most of the staff are paid at little more than minimum wage levels, although key staff have to be paid significantly more in order to attract personnel of the highest calibre.

We constantly lose staff to the Local Authority Maintained sector as they can pay a higher level of salary.

The minimum wage level has risen from £3.60ph in 1999 to the current level of £9.50ph

A rise of 264% (rising in April 2023 to £10.50ph = 292%).

This figure is plus 13%. Employers N.I. and Pension contributions

In 1997 minimum hourly wage rate was 63p ph = 21% ph, above the Grant level.

In 2022 the minimum wage level is £5.11p ph = 112% ph, above the Grant level.

In 2023 that will increase to 141% ph above the Grant level

All these plus 13% N.I. and pension contributions.

This continually rising differential is totally unsustainable.

Business Rates

Most settings attract business rates at a premium level (Small business rates relief only applies to businesses with a rateable value of less than £15,000)

Schools attract a much lower business rates level, even on their EY setting and yet              ALL SETTINGS are paid the same level of Grant (£4.39ph in in 2022 in Blackpool).

I have recently been informed by the Valuation Office that my Valuation for  business rates will rise in April from £22,500 to £40,000 a rise of 80%.

How can it be that two parts of the same Early Years Provision sector who receive the same level of income source are rated differently?

If it is assumed by the Valuation Office that rental value and profitability are increasing  annually then L.A. schools must be viewed in similar circumstances or more realistically P.V.I settings should be rated at the same level as L.A. Settings.

Conclusion.

It must be concluded that unless the level of Grant Funding is increased significantly and with urgency many Early Years Settings will close creating a lack of provision on a National scale thus putting many children, most of these in deprived areas at a disadvantage.

This would create a void in Primary Education on National scale thus requiring massive funding to offset the first stepping stones in a child’s education currently supplied by Early Years Settings

The National Day Nurseries Association and Early Years Alliance wholly  support the fact that the Grant Funding  is grossly insufficient at the present time.

February 2023