Aims and objectives Our aims: Share the latest information and - - PowerPoint PPT Presentation

Aims and objectives

Our aims:

• Share the latest information and guidance on the funding arrangements in place to

support childcare sufficiency during the outbreak of coronavirus (COVID-19).

• Answer questions from early years providers and local authorities as best we can.

By the end of the vodcast, attendees will:

• Have a greater understanding of the latest guidance on funding arrangements.
• Know where to go to for further information.

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Who is this vodcast for?

• This vodcast is aimed at local authorities (LAs) and early years providers who receive free early

education entitlement (FEEE) funding.

• It should be watched alongside reading the latest guidance on early years funding arrangements

to support childcare sufficiency during the coronavirus (COVID-19) outbreak.

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Introduction

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• The government’s priority for the early years sector during the coronavirus (COVID-19) outbreak is first and

foremost to ensure sufficient childcare for vulnerable children and children of critical workers who cannot be looked after at home.

• In the latest guidance for LAs and early years providers, we have set out the priorities that we want LAs to

consider in funding FEEE childcare places for eligible children during the coronavirus (COVID-19) outbreak.

• LAs operate differently, and many are successfully managing to ensure sufficiency in their local areas

through their market knowledge and positive relationships with providers.

• The government has also made a range of business support available to early years settings.
• However, ensuring provision is available for children who need it will not always be straightforward.

The latest guidance sets out our support for LAs to use their dedicated schools grant (DSG) funding differently during the coronavirus (COVID-19) outbreak, if other options have been exhausted, so that children of critical workers and vulnerable children who are eligible for the early years entitlements are able to receive their FEEE childcare places.

What does the guidance include?

• Information about the government’s position on continued payment of DSG funding during the

coronavirus (COVID-19) outbreak.

• An explanation of the funding flexibility available to LAs to support them in securing sufficient

childcare for children who need it, including technical details about how this can be implemented.

• A description of the cohorts of children for whom LAs can continue to fund places under the early

years entitlements.

• Information about the Coronavirus Job Retention Scheme (CJRS) and how, if LAs choose to use

the DSG funding flexibility as part of their strategy for securing sufficiency, this interacts with the scheme.

• An update on powers under the Coronavirus Act 2020 to require early years settings to open or

reopen.

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LA management of DSG funding

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• LAs will continue to be paid their DSG in the usual ways.
• LAs are best placed to monitor and manage their local childcare market and have responsibility for ensuring

sufficient places.

• LAs should initially aim to secure the required childcare places by using places that are already funded through

DSG, including moving children between providers where one has closed and another has empty DSG-funded

• places. In many cases, this will be possible without additional cost to the LA.
• In some cases, ensuring sufficient places during the outbreak may incur additional costs. Early years DSG

block contingency budgets (where applicable), or uncommitted central spend in the early years budget, should be considered first to meet such costs.

• Where these options have been exhausted, and only in exceptional circumstances, LAs have the flexibility to

redistribute funding for FEEE, in a clearly focused and targeted way, from providers who have closed to those who are open and caring for eligible children.

• LAs should continue to work in partnership with their early years sector and, wherever possible, agree

any funding changes with individual providers rather than imposing them.

Funding flexibility for LAs

• Where it is necessary to redistribute early years DSG, LAs should redetermine the amounts allocated to early

years settings that have closed, in order to redistribute necessary funding to settings which are open. LAs can use their existing powers to do this.

• LAs should only remove DSG funding from early years settings that are closed during the coronavirus

(COVID-19) outbreak in exceptional circumstances and should consider the impact of removal on the longer- term sustainability of that setting and the local childcare market.

• They should consider very carefully whether any reduction in DSG would put at risk the ability of the setting

to meet ongoing operational costs even whilst closed and consider the impact on the number of staff the setting could furlough under the CJRS.

• Settings where DSG funding is removed will in turn be able to increase the proportion of their salary bill

eligible for the CJRS. Similarly, any providers receiving increased DSG to provide additional childcare for children of critical workers, should reduce the proportion of their salary bill that is eligible for CJRS accordingly.

• LAs will need to consider and consult with settings on who are best able to manage such changes in funding.

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Which children can LAs consider redistributing DSG funding for?

• LAs should only redistribute DSG funding if absolutely necessary to fund provision for children who are

already eligible for free early education and care under one of the early years entitlements.

• This is intended to ensure that those families are able to continue accessing their entitlement to free

childcare during the coronavirus (COVID-19) outbreak.

• The free early years entitlements are:
• the 2-year-old entitlement (up to 15 hours per week).
• the universal entitlement for 3- and 4-year-olds (up to 15 hours per week)
• the extended entitlement for 3- and 4-year-olds of eligible working parents (up to 30 hours per week).
• Within the existing cohort of children who access the early years entitlements, only those who meet the

government’s definition of children of critical workers and vulnerable children should be accessing early years provision at this time, in line with measures to limit the spread of coronavirus (COVID-19).

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Temporary extension of eligibility criteria for the 2-year-old entitlement to s.17 no recourse to public funds children

• We are temporarily extending eligibility criteria for the 2-year-old entitlement to include children assessed as

being vulnerable and meeting the definition in Section 17 (s17) of the Children Act (1989) and who have No Recourse to Public Funds (NRPF), for the duration of coronavirus (COVID-19) only.

• This is to support their safety and wellbeing whilst restrictions are in place.
• Eligible children are British-born child(ren) who are entitled to be in the country yet are not receiving support

by virtue of their parents’ immigration status, which triggers the NRPF.

• LAs will be reimbursed for eligible children who have physically taken up a temporary free 2-year-old place

by attending an early years childcare setting during COVID-19.

• Further guidance for LAs on the reimbursement process will be available soon and we will inform LAs when

this temporary extensions of the eligibility criteria has come to an end.

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The Coronavirus Job Retention Scheme (CJRS)

• The CJRS is designed to support employers whose operations have been severely affected by

coronavirus (COVID-19) by providing them with a grant to help them to continue paying part of their employees’ wages who would otherwise have been laid off during this outbreak

• The CJRS will allow furloughed staff to receive up to 80% of their usual monthly wage costs, up to

£2,500 a month, plus the associated Employer National Insurance contribution and minimum automatic enrolment employer pension contribution on that wage.

• An early years provider can access the CJRS to cover up to the proportion of its salary bill which could

be considered to have been paid for from that provider’s private income. This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s early years entitlements (or ‘DSG income’) for all age groups.

• Providers should initially use the month of February 2020 to represent their usual income in calculating

the proportion of its salary bill eligible to be covered by the scheme.

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What should LAs consider when making decisions about how they use funding flexibly?

• The current sufficiency of childcare for children of critical workers and vulnerable children.
• If there is sufficient childcare then a LA does not need to shift DSG funding but may consider it

necessary if there are not sufficient places and moving funding would help resolve the issue.

• The current financial security of a setting.
• If a LA removes DSG from a setting which equates at least in value to the salary of a staff

member, that setting will be able to consider furloughing that staff member and accessing additional support from the CJRS.

• The relationship between the amount of DSG and a staff member’s eligibility to be furloughed

will depend on an individual providers’ circumstances.

• The LA should be confident the setting has the financial security to withstand lower DSG income

during the COVID outbreak.

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How does a LA’s use of its funding flexibility interact with the CJRS?

• If an LA withdraws some DSG funding from a provider, the provider will need to assess if this

reduction require additional staff to be furloughed through the CJRS as a result. If necessary, they can then increase the proportion of their salary bill eligible for a CJRS application.

• Where an LA increases DSG funding to a provider, that provider should reduce the proportion of

their salary bill that is eligible for furloughing, and therefore for a CJRS application, from the proportions they had calculated at the outset.

• To calculate how much that provider can expect to recover from the CJRS:
• Take the amount of DSG funding that is not paid by the local authority.
• Multiply that by the usual salary bill divided by the usual weekly total income.
• Multiply by 80%.

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Q&A break

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How can providers calculate their CJRS eligibility?

• It is important to note that in this example, a provider can only make a claim from the CJRS in

respect of identifiable, individual members of staff, who can be furloughed and claimed by name and Pay As You Earn (PAYE) number. So an employer can furlough staff whose total pay adds up to, at most, the ‘claimable’ total set out in the example below (and who meet the other criteria for the access to the CJRS).

• To calculate who a provider can furlough through the CJRS:
• Take the proportion of a provider’s income that comes from DSG by dividing the weekly

income from DSG by the provider’s total weekly income.

• Take this figure away from 100% to get the proportion of income from non-DSG income.
• Multiply that by the usual weekly salary bill to determine the proportion of the salary bill

eligible for the CJRS.

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Example of a provider’s calculation of their maximum eligibility to CJRS

• A provider has a usual (pre-COVID-19) total weekly income of £4,000 of which £2,200 comes

from DSG and £1,800 from other income (e.g. parent fees), and a usual salary bill of £2,500 per week.

• The proportion of a provider’s income that comes from DSG is £2,200/£4,000; that means

55% of income comes from DSG.

• 100% - 55% means that 45% of the provider’s income comes from non-DSG income.
• 45% of the usual weekly salary bill of £2,500 is £1,125. So this provider can furlough staff

whose pay totals, at most, £1,125 a week.

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Q&A break

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Moving staff off their current three-week furlough

• Where the DSG income of an early years provider increases to allow for payment of an additional

staff member, CJRS support will cover the full three-week period for which that staff member has been furloughed.

• The staff member must wait three weeks before they can return to work to be ‘paid for’ by DSG

funding.

• Where DSG income reduces in a similar manner, the staff member can be furloughed, as long as

the application meets the five conditions set out in HMRC’s and DfE’s guidance, and an application for support may immediately be made to the CJRS.

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Powers to require settings to open or reopen under the Coronavirus Act 2020

• The government’s financial support package for providers and the flexibility LAs have to

redistribute DSG if absolutely necessary during the coronavirus (COVID-19) outbreak should, in most cases, enable LAs and providers to work in partnership to secure sufficient childcare places for vulnerable children and children of critical workers.

• However, in cases where all other options have been explored and there remain too few places

locally for children who need them, the Coronavirus Act 2020 creates the power for the Secretary

• f State for Education (or a LA if authorised to do so) to direct registered childcare providers to

close or alter how they operate.

• We are currently considering whether to use any of those powers and if so, the best processes to

sit around them. We will say more on this when it is appropriate to do so.

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Q&A break

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Useful links (1)

Link to guidance - Actions for early years and childcare providers during the coronavirus outbreak: https://www.gov.uk/government/publications/coronavirus-covid-19-early-years-and-childcare-closures/coronavirus-covid-19-early-years-and-childcare-closures

Link to closure of educational settings: information for parents and carers guidance: https://www.gov.uk/government/publications/closure-of-educational-settings-information-for-parents-and-carers/closure-of-educational-settings-information-for- parents-and-carers#resources-and-support Link to information on the range of financial support packages available: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses- about-covid-19/covid-19-support-for-businesses Link to business support finder to see what support is available for you and your business: https://www.gov.uk/business-coronavirus-support-finder Link to specific guidance on the Coronavirus Job Retention Scheme (CJRS), issued by HMRC 26 March: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme Link to subsequent guidance issued on CJRS clarifying the position for early years providers (and other business support available) on 17 April, updated 22 April: https://www.gov.uk/government/publications/coronavirus-covid-19-financial-support-for-education-early-years-and-childrens-social-care/coronavirus-covid-19- financial-support-for-education-early-years-and-childrens-social-care#sector-specific-guidance Link to CJRS claim checker: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#who-can-claim

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Useful links (2)

Link to government’s Coronavirus (COVID-19) Self-employment Income Support Scheme, announced on 26 March: https://www.gov.uk/guidance/claim-a-grant- through-the-coronavirus-covid-19-self-employment-income-support-scheme Link to guidance on other grant funding schemes: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878082/small-business-grant-and-retail-leisure-hospitality- grant-guidance-for-businesses-v2.pdf Link to DSG flex guidance: https://www.gov.uk/government/publications/use-of-free-early-education-entitlements-funding-during-the-coronavirus-outbreak/use-of-free-early-education- entitlements-funding-during-coronavirus-covid-19