Cash-strapped Northamptonshire County Council is proposing to reduce the amount it pays to nurseries and childminders in a bid to reduce £1.8m from its early years payments.
Early years providers are up in arms about the proposal which comes in the midst of an 18-month ongoing payment fiasco which has seen the county authority underpaying hundreds of businesses and childminders by thousands of pounds after failing to work a new payment system.
The authority says it has overspent by £1.5m in its early years budget this year and should have reduced subsidies before now.
The authority, whose children’s services is being overseen by a Government-appointed children’s commissioner and has a new head of service, says if it does not make reduce the amount it gives to early years providers it will go £1.8m over budget in 2019/20.
It is proposing from April to reduce the amount of subsidies it pays to providers which provide what are seen as extras such as ‘quality’, given to those childminders or nurseries whose staff have certain qualifications. This could save the council £1m. There are also plans to cut the amount given in subsidies to those who look after children from deprived areas and also a special educational needs subsidy.
Childminder Lynn Haycocks, from Great Oakley, said the news has come as a big shock to early years providers as before the proposal was made public it had been thought a drop in subsidies may have been countered by a rise in the basis rate.
Former teacher Lynn receives an extra 50p per hour on top of the £3.66 per hour basic rate.
The proposal is to either remove this subsidy completely or cut it by half or more.
She said: “Working it out generally I am going to lose £600 a year just thinking the figures through quickly with three children on funded. What about nurseries?”
A report to be discussed by the schools forum being held in Northampton later today (March 18) says: “With the information we now have available it is clear early years costs including early years single funding formula payments to early years providers should have been reduced for the 2018- 19 financial year.
“This did not take place which is why the overspend is occurring in 2018-19 and will continue unless action is taken.
“The local authority is aware of the significant impact of the proposed changes, but in 2018-19 we are spending more than the government grant that we are receiving. This is not sustainable.
“If continued it would require cuts in schools or high needs budgets and services or a LA contribution which is also unlikely.”
The proposal will see the base rate of £3.66 per hour per child aged three to four stay the same. The £5.10 hourly rate for two-year-olds will also stay the same.
There are 601 early years providers in Northants who between them look after 10,453 under-fives.
The schools forum, which is made up of nurseries, teachers and schools representatives, will decide whether to back the proposal at the meeting today.