Source · Select Committees · Education Committee
Recommendation 5
5
Accepted in Part
Paragraph: 39
Consider greater ring-fencing of Early Years block for local authority Dedicated Schools Grants
Recommendation
We recommend the Government consider the case for greater ring-fencing of the Early Years block of each local authority’s Dedicated Schools Grant to ensure that more is passed on to the early years providers who are delivering the funded hours entitlements.
Government Response Summary
The government commits to increasing the minimum pass-through rate for early years funding to 97% once the new entitlements are sufficiently rolled out. They currently require local authorities to pass on at least 95% of funding and are consulting on setting this rate on individual funding streams for 2024-25.
Paragraph Reference:
39
Government Response
Accepted in Part
HM Government
Accepted in Part
DfE wants to support local authorities to manage their Dedicated Schools Budgets in the round and ensure they are appropriately funded to carry out all the duties placed upon them, whilst also maximising the amount of early years block funding being passed on to early years providers. To maximise the amount of funding reaching providers, we require local authorities to pass on to providers at least 95% of their Government funding for 3 and 4-year-olds. This is to support local authorities in their carrying out of administrative and other tasks associated with the new entitlements (e.g., SEND support, eligibility checking, etc). In practice, local authorities exceed this and pass on, on average, 97% of their funding. This is largely through the hourly rate as well as targeted funding, including Special Educational Needs Inclusion Funds and money local authorities set aside for in-year increase in take-up of the entitlements. In our consultation on extending the early years entitlements, launched on 21 July 2023, we are proposing, for 2024–25, to set a 95% pass-through rate on each individual early years dedicated schools grant funding stream. As the quantum of funding in the early years block increases with the roll out of the new entitlements, the proportion of overall funding local authorities will need to hold back for central support will fall. DfE is therefore intending to increase the minimum pass-through rate to 97% once the roll-out of the new entitlements is sufficiently progressed to allow this. We will keep the timing of this under review. The final pass-through arrangements for 2024–25 will be confirmed in the Government response to the consultation due to be published in the autumn.