Today, Early Education, the NAHT, NEU and Unison have jointly written an open letter calling on the government to address the shortfall in early years funding.

The letter asks the Secretary of State for Education and the Chancellor to prioritise raising the funding for the early education entitlements:

Before any expansion of the number of funded hours or age groups can take place, the current entitlements need to be adequately funded to stabilise the sector, and remove the need for cross-subsidy and top-up charges which are currently driving the high level of fees to parents.

The letter highlights that schools and settings’ budgets are being severely hit, by a combination of increased staff costs, funded entitlement rates not keeping pace with inflation, increased heating and fuel costs, increased demand for support for children with SEND coupled with decreased funding, staff cover costs and inflation more generally.  Maintained settings are struggling to fund pay increases to teachers’ pay and local authority payscales, and having to cut staffing where funding falls short, while PVI settings are struggling with the increases to the National Minimum Wage, and as a result, face greater recruitment and retention issues. In both cases, there is a clear need for entitlement rates to reflect pay increases in the sector.

The letter draws on the findings of a recent survey of members which also found that schools and settings in areas of high deprivation are being particularly hard hit by the below-inflationary increases in funding due to the additional costs of meeting higher levels of need, and the lack of opportunities to cross-subsidise from parent-paid fees.

Other key findings that from our survey are:

• Only 3% of respondents expect to be able to continue their current levels of service in twelve months’ time
• 30% can continue current services, but only if they implement cuts
• 39% were only confident of their future for 12 months, but not beyond that, while…
• …18% were not confident about whether they could continue for another 12 months
• 73% will not break even in 2022-23
• 56% of providers will use up some or all of their reserves offsetting costs, while…
• …40% have no reserves to draw on, or already have a cumulative deficit
• 63% of providers do not expect to balance their budget in 2023-24
• 47% of providers are reducing the number of staff or the number of hours worked by staff, with 41% are freezing vacancies or not making permanent appointments.

Read the full letter: