Treasury and Resources
Ministerial Decision Report
provisional Transfer from Central Contingency to the Education Department following the Education Minister’s decision TO RESCIND means-tested Nursery education
- Purpose of Report
To enable the Minister to approve the provisional transfer of up to £250,000 in 2018 and up to £467,000 in 2019 from Central Contingency to the Education Department revenue head of expenditure following the Education Minister’s decision to rescind means-tested nursery education from September 2018.
- Background
In September 2016 the States Assembly approved P.68/2016, the addition to the Medium Term Financial Plan, which included a proposal to means-test nursery education from September 2018 in privately-owned nurseries that receive subsidies from the Nursery Education Fund (“NEF”). The means-testing was extended to States primary schools after Amendment No.4 was approved.
The reason for the means-testing proposal was two-fold:
- To help meet the Education Department’s MTFP savings commitments while protecting core, statutory services.
- To control the rising cost of the NEF, which was exceeding its budget and was therefore not financially sustainable.
Reason for rescindment
Following the announcement of the means-testing proposal, a number of fundamental questions were raised about the early years education provision in Jersey and the direction it should take in future in order to be of maximum benefit pre-school to children and their families.
The Education Minister confirmed that broader discussions were required in order to develop a strategy for the future of early years and to review the immediate funding problems experienced by the NEF.
In April 2017 the Early Years and Childhood Partnership (EYCP), which included representatives of private nurseries, the voluntary sector providers and States departments, was formally requested to undertake a review.
On 27th November 2017 the Education Minister advised the States Assembly that, following receipt of a report from the Early Years Childhood Partnership entitled ‘Review of Early Years Education in Jersey’, he wished to withdraw the means-testing proposal so that it would not be implemented in either States Primary schools or privately-owned nurseries.
The resulting EYCP report, ‘Review of Early Years Education in Jersey’ was published on 4th December 2017.
The EYCP report proposed that the removal of free nursery care for some children on the basis of their parents’ income was a retrograde step. It felt that the States should be attempting to expand the amount of provision, possibly expanding free or subsidised early childhood education to younger children, particularly if they were at risk of underperformance at school because of social disadvantage. The same principle underpins the Jersey Premium scheme in Jersey and the Pupil Premium scheme in the UK.
The EYCP report presented a series of immediate, short-term and medium-long term recommendations, the first of which is to:
“Retract current proposals to means test families for access to the 20 free hours in both the private and the public sector. Revisit the Nursery Education Fund (NEF) partnership agreement and consider reviewing the number of places of registered nurseries in line with demand.”
The report also challenged the Education Department to explore partnership arrangements with both the private sector and parishes in order to deliver more integrated services to parents. The EYCP calls for investment to enable the development of children’s centres that could focus on supporting early childhood education at every stage, starting before conception to babies, toddlers and young children. The concept of prioritising and supporting young families aligns with the Education Department’s four key priorities, particularly ‘Families’ and ‘Standards’.
The EYCP vision for an integrated and universal childhood education service for Jersey is shared by the Education Department and is embedded in research, which shows the clear benefits of investment in early years education. The EYCP has identified three principles, which it believes should be at the heart of early years education services. These are:
- Principle 1: High quality for all
- Principle 2: Accessible
- Principle 3: Choice and flexibility
Having considered these principles alongside the recommendations outlined in the report, the Education Minister has concluded that it would be inappropriate to continue with the means-testing proposals. What is now required is a fresh look at the delivery of Early Childhood Education in accordance with these principles and recommendations. The Education Minster fully recognises the importance of subsidising nursery hours for all families, but particularly those that find it difficult to afford childcare costs in Jersey. However, the discussions must now be broadened so that the NEF funding is not seen as the main issue but as part of a continuum of integrated and universal services that span all the pre-school years.
The Education Minister maintains that changing the NEF and States nurseries to introduce means testing at this stage could increase uncertainty for parents and, more significantly, lead to a fall in the number of children accessing nursery. It would be preferable to retain the current system until a new funding scheme has been created to replace the NEF.
3. Recommendation
The Minister is recommended to approve the provisional transfer of up to £250,000 in 2018 and up to £467,000 in 2019 from Central Contingency to the Education Department revenue head of expenditure following the Education Minister’s decision to rescind means-tested nursery education from September 2018.
The Contingency funding provisionally allocated is subject to the Department not being able to meet the costs from existing resources, through efficiency savings or underspends, in 2018 and 2019. If the department is in an overspend position for either year after meeting costs of the decision to rescind means-tested nursery education the Contingency funding allocated by this decision will be that required to achieve a break-even position.
4. Reason for Decision
Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.
The current Contingency Allocation Policy (published as R.110/2017) sets the requirement for all allocations from Contingency over £100,000 to be considered by the Council of Ministers prior to submission to the Minister for approval.
The purpose of introducing means testing in 2016 was to enable the Education Department to meet its savings commitment for the MTFP and to control the expenditure of the NEF. The MTFP savings target is £250,000 in 2018 rising to £467,000 in 2019. Withdrawing the means testing proposal will mean this saving will have to be found elsewhere, either from another part of the Education Department’s budget or from central funds (e.g. contingency). The Education Minister recognises both these options present challenges, particularly as education has been recognised as a strategic priority by the Council of Ministers.
The Education Minister’s decision to rescind means-tested nursery education was discussed at the CSB meeting on 23rd January 2018 and the position noted at the Council of Ministers meeting on 7th February 2018.
5. Resource Implications
Central Contingency to decrease by up to £250,000 in 2018 and up to £467,000 in 2019 and the Education Department revenue head of expenditure to increase by identical amounts.
This decision does not change the total amount of expenditure approved by the States for 2017-2019 in the Medium Term Financial Plan.
Report author : Head of Decision Support | Document date 28th March 2018 |
Quality Assurance / Review : Director of Financial Planning and Performance | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2018-0042 – NEF £250k from Contingency to Education Department |
MD sponsor: Treasurer of the States |