Education and Lifelong Learning Overview and Scrutiny Committee Thursday May by ramhood15


									            Education and Lifelong Learning Overview and Scrutiny Committee
                                                      Thursday 20 May 2004
                                                        Urgent Item – Call-in

                         MEDWAY COUNCIL


                              11 MAY 2004

               REVENUE BUDGET 2004/2005 -

Portfolio holder:   Councillor Les Wicks – Education
                    Councillor Alan Jarrett - Finance

Director:           Rose Collinson, Director of Education and Leisure

Author:             Bjorn Simpole, Overview and Scrutiny Co-ordinator

1.     Summary

1.1    To report the views of the Education and Lifelong Learning Overview
       and Scrutiny Committee on the decision on nursery education grant
       during 2004/2005 made by Council who are asking Cabinet to

2.     Decision Issues

2.1    Transfer between the Council’s main budget heads is not permitted
       without the agreement of the Council. The funding options proposed by
       the Education and Lifelong Learning Overview and Scrutiny Committee
       would, if agreed b y Cabinet, require a recommendation to be made to
       full Council.

3.     Background

3.1    At the Council meeting on 8 March 2004, members decided not to
       increase the level of grant provided to nurseries and pre-schools in the
       non-maintained sector. This decision was taken as part of the budget
       setting process and was one of a range of options which enabled the
       Council to set its council tax increase at 9.8% and thus reduce the
       likelihood of capping being imposed on the council.

3.2    At the following Council meeti ng on 7 April 2004, two petitions were
       presented by Councillors Godwin and Mrs Shaw on behalf of Jumping
          Education and Lifelong Learning Overview and Scrutiny Committee
                                                       Thursday 20 May 2004
                                                          Urgent Item – Call-in
      Jacks Nursery and White Road Pre-School respectively, voicing
      concern about the decision to freeze grant levels in 2004/05.

3.3   The full wording contained in the petitions was as follows: -
      “We the undersigned would like to express our concern at the freezing
      of the nursery education grant which may jeopardise the future of pre-
      school education in Medway within the private and voluntary sector.

      We feel that it is unfair that the funding has not even been increased at
      the rate of inflation and is discriminatory for our children, whereas 3 & 4
      year olds in the maintained sector will receive an increase of between 4
      – 6%.

      We would like to bring this issue to the attention of Medway Councillors
      and ask for a reconsideration of this decision”.

3.4   In accordance with the constitution, this matter was referred to the next
      Overview and Scrutiny meeting on 22 April 2004, where members were
      considering the implications of the revenue budget for Education in

3.5   Prior to the meeting, petitions from a further 19 nurseries or pre-
      schools were handed in to officers, which had in excess of 1200
      signatures. A letter from the pre-school learning alliance with the
      minutes of a providers forum were also circulated to the committee. A
      number of committee members also presented letters at the meeting
      that they had received from parents in their local area.

4.    The effects of a grant freeze

4.1   Around 25 nursery providers, employees and parents attended the
      Education and Lifelong Learning Overview and Scrutiny Committee
      meeting and several put forward their case for seeking a
      reconsideration of the decision to freeze the level of nursery education
      grant. Key points which they asked the committee to take into account
      included: -

      •   The decision not to provide an increase to the non-maintained
          sector is discriminatory and will place in doubt the viability of a
          number of Medway pre-schools.

      •   Pre-schools do not have any o ther sources of income than the grant
          received from the local authority and their costs are rising
          particularly in respect of business rates and the implementation of
          an increased minimum wage.

      •   The pre-school learning alliance was aware of a number of
          providers already in financial difficulties and the budget freeze
          would only exacerbate the precarious situation that many found
          themselves in.
            Education and Lifelong Learning Overview and Scrutiny Committee
                                                      Thursday 20 May 2004
                                                        Urgent Item – Call-in

      •    The curriculum being delivered in the non-maintained sector is the
           same as that offered in school based nurseries who had received a
           4% increase in financial provision in 2004/05. They are also subject
           to the same Ofsted inspection requirements.

4.2   Members questioned the Portfolio Holder for Education, Early Years
      and Childcare Services Manager and Director of Education and Leisure
      on the reasons for and implications of the freeze in grant funding. In
      response to questions they highlighted that: -

      •    Each local authority has the power to set its own level of grant
           funding to the non-maintained sector. Whilst the grant freeze will
           result in Kent providing a higher level of grant to its sector, the grant
           of £1248 per child by Medway in 2004/05 is comparable with a
           number of other local authorities.

      •    Funding for the maintained sector was provided through delegated
           schools funding and there is no discretion to withhold any increase
           in budget provision.

      •    This year’s budget settlement for Education left members with
           having to make some budget savings that they would have
           preferred to not make. Of the £5.9 million increase for education,
           £5.7 million had to be passed directly to schools, leaving very little
           scope for increasing funding to the non-maintained sector.

      •    The Portfolio Holder assured providers that in respect of funding for
           2005/06, he would be doing his utmost to ens ure that a grant freeze
           did not happen again.

      •    The freeze in grant is equivalent to £30 per child per year and pre-
           schools will not be able to charge any form of top-up to parents.
           Nursery places must remain free for those who require them.
           However, the non-maintained sector could make additional charges
           for additional services over and above the statutory minimum

5.    Overview and Scrutiny Conclusions

5.1   In requesting that the Cabinet reconsiders its decision to freeze nursery
      education grants to the non-maintained pre-school sector, the
      Committee’s views are: -

      a)      The committee is of the view that the Cabinet and Council were
              not made aware of the full implications that the freeze in grant
              funding would have
           Education and Lifelong Learning Overview and Scrutiny Committee
                                                        Thursday 20 May 2004
                                                          Urgent Item – Call-in
      b)     The imposition of this freeze in funding has been carried out with
             little discussion with providers and has damaged the partnership
             approach that is required between the council and pre-school

      c)     The closure of any pre-schools could place into doubt the
             Council’s ability to fulfil its statutory duty to provide free nursery
             education places

      d)     The budget papers for Council on 8 March 2004 indicated that a
             further £54,000 saving from this budget would not be

      e)     The freeze in funding will place the non-maintained sector on an
             unequal footing with school based provision, in view of the 4%
             increase provided to the maintained sector

      f)     The Cabinet should reconsider its priorities in investing
             £150,000 for the First Point of Contact, whilst placing the futures
             of some pre-schools in doubt

      g)     Members ought to assess the possibility of reducing the Ward
             Improvement Fund, which has been untouched by budget
             savings, if an increase in grant to the non-maintained sector is

6.    Director of Education and Leisure’s Comments

6.1   At its budget setting meeting the council decided to freeze the annual
      rate of the Nursery Education Grant for 2004/05, keeping it at the same
      rate that was paid for 2003/04. The grant rate is £1,248 per pupil per
      year (for a child attending five part time sessions each week during
      term-time of 33 weeks per year).

6.2   In 2004/05 the council will be allocating £4,371,600 to private and
      community pre-schools and nurseries (non-maintained nursery
      providers), which compares with £4,307,800 in 2003/04. The increase
      in funding of more than £60,000 reflects the increasing number of
      children in Medway whose parents are taking advantage of their
      entitlement to free part-time nursery education.

6.3   The decision not to increase the level of funding per pupil means that
      the council will be saving £108,000. This was taken in the context of
      reducing the Education budget requirement by some £4.2 million, from
      a net available budget of approximately £30 million.

6.4   Nursery Education Grant was until April 2003 funded by a direct
      Department for Education and Skills (DfES) grant. The rate of grant
      paid to non-maintained nursery providers was set each year by the
      DfES, but local authorities had the discretion to “top slice” the
            Education and Lifelong Learning Overview and Scrutiny Committee
                                                         Thursday 20 May 2004
                                                           Urgent Item – Call-in
       payments to fund other early years activities. In Medway, the whole
       amount of funding was passed directly to providers without any top-

6.5    For the financial year 2003/4 government grant funding of nursery
       education was transferred to the Council’s base budget. The
       responsibility for determining the rate of the grant also passed to the
       local authority. In 2003/4 Medway Council agreed to a grant rate
       increase equal to that of previous years. This resulted in a grant level
       of £1248 which was amongst the highest nationwide. The grant level
       for 2004/5, whilst remaining at £1,248, still compares favourably with
       that paid to nursery providers by many other local authorities in the
       south-east region.

6.6    In addition, significant resources are provided to support nursery
       education for three and four year-olds in Medway – including a team of
       curriculum support advisers and area special educational needs co-
       ordinators (SENCOs), an inclusion budget to provide financial support
       for three and four year-olds with additional needs, and a range of other
       grants, training opportunities and resources.

6.7    The Council pays Nursery Education Grant funding to 130 private and
       voluntary (non-maintained) pre-schools and nurseries in Medway. Last
       term (spring 2004) there were 3,607 three and four -year-olds receiving
       funded foundation stage (nursery) education in non-maintained pre-
       schools and nurseries and 2,664 three and four -year-olds receiving
       free foundation stage education in Medway’s maintained schools.

6.8    Funding for children aged 3 or 4 years who are in school is provided as
       part of the annual budget for each school, and not through Nursery
       Education Grant. The funding for children in nursery classes and
       reception classes is not calculated separately from that of other
       children in the school. The Secretary of State for Education required
       that LEAs provided a minimum 4% per pupil guaranteed increase to
       schools’ budgets for 2004/5, and the funding allocated to Medway
       schools reflects this.

6.9    Medway Council has been successful in ensuring that any child aged
       three or four years of age, whose parent wants one, can access a part-
       time nursery education place free of charge, and remains committed to
       this policy. Within the grant regulations it is a requirement that all
       providers are able to offer parents a free part time place of at least 2½
       hours duration for a minimum of 33 weeks in an academic year. No
       additional ‘top up’ fee can be charged for this, although charges may
       be made for additional services such as daycare or full time education.

6.10   Parents may choose a nursery setting where a charge is made (for
       example a day nursery catering for working parents), and in these
       instances the full amount of the nursery education grant paid to the
       nursery should be deducted from the fees paid by the parent.
            Education and Lifelong Learning Overview and Scrutiny Committee
                                                      Thursday 20 May 2004
                                                        Urgent Item – Call-in

7     Financial and legal implications

7.1   The financial details of grant funding for the non-maintained pre-school
      sector in 2004/05 are contained in the Directors comments section

7.2   Should the recommendation be accepted, a permanent transfer of
      budget from outside the education service will be required. This will
      create service implications elsewhere in the Council.

7.3   Although overview and scrutiny recommend funding the increase from
      non-education budgets, this does not preclude the Education and
      Leisure Directorate from identifying alternative sources of funding from
      within its own budget.

7.4   Local authorities have discretion in the level at which nursery education
      grant is set – subject to compliance with Section 118 of the Schools
      Standards and Framework Act 1998, i.e. ensuring sufficiency of free
      nursery places for eligible 3 and 4 year olds and subject to there being
      regard to relevant regulations and guidance produced by the Secretary
      of State. The entitlement of free nursery education is currently 55, 2.5
      hour sessions for each of the 3 terms.

7.5   If a parent is not satisfied that their child is receiving free nursery
      education, then there is a right of appeal. Delivery of free nursery
      education will be judged by availability across Medway’s area rather
      than availability at a particular nursery.

7.6   The Secretary of State for Education required that local education
      authorities provide a minimum of 4% per pupil guaranteed increase to
      school budgets for 2004/2005. This requirement did not extend to
      make a similar increase in respect of nursery education grant.
      Therefore, there is no strict obligation to ensure parity of any funding

8.    Recommendations

8.1   The Cabinet is requested to consider the recommendation from the
      Education and Lifelong Learning Overview and Scrutiny Committee to
      reinstate either the full £108,000 inflationary increase (2.5%) or
      £54,000 (1.25%), from non-education budgets with two possibilities
      being: -

      (i)     Reducing financial provision for the First Point of Contact
            Education and Lifelong Learning Overview and Scrutiny Committee
                                                      Thursday 20 May 2004
                                                        Urgent Item – Call-in
       (ii)   Reducing provision for the Ward Improvement Fund by £1000
              per member to fund a 1.25% increase

       and if agreeable to either, to make the necessary recommendation to

9.     Suggested reasons for decision

9.1    The freezing of nursery education grants during 2004/05 is likely, in the
       view of overview and scrutiny members, to result in financial hardship
       to providers and could place in doubt the provision of a free pre-school
       place to all who wish to access one.

Lead officer contact

Bjorn Simpole
Overview and Scrutiny Co-ordinator
01634 332104

Mark Holmes
Early Years and Childcare Service Manager
01634 331160

Background papers

Revenue Budget 2004/2005 and Business Plans reports

o     Cabinet 25 November 2003
o     Cabinet 16 December 2003 (Provisional Financial Settlement)
o     Education and Lifelong Learning O&S Committee 8 January 2004
o     Finance and Performance Management O&S Committee 13 January
o     Cabinet 27 January 2004
o     Council 19 February 2004
o     Cabinet 1 March 2004
o     Cabinet 8 March 2004
o     Council 8 March 2004
o     Education and Lifelong Learning O&S Committee 22 April 2004

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