Agenda item

Head of Finance (CYPS) to report.

Recommendations:

That Schools Forum:

1.  Notes the provisional DSG funding settlement for the early years block for Rotherham for 2026/27;

2.  Notes the proposed arrangements for allocating the early years funding to providers for 3 & 4 year olds, 2 year olds and under 2’s.

3.  Endorses the proposed early years funding rates to providers for the 2026/27 financial year.

The Head of Finance (CYPS) outlined the proposed funding arrangements for Rotherham’s Early Years Block for 2026/27.

Rotherham’s provisional settlement for the 2026/27 early years block was £49.7m which represented an increase of £7.3m.  The increase was driven by expected growth in take?up of entitlements, particularly for two?year?olds and under?2s, alongside national increases to funding rates.

The Early Years National Funding Formula (EYNFF) continued to underpin allocations, with 2026/27 funding rates rising by 5.3% for 3–4?year?olds and 4.3% for under?2s to reflect cost pressures across the sector. The significant growth in funding for two?year?olds and under?2s, reflected the full?year effect of the entitlement expansion.

Grants including National Insurance and teachers’ pay grant had been rolled into the Early Years DSG to simplify the funding model. The Forum’s attention was drawn to the DfE’s move to a termly funding system which would represent a significant change to current arrangements.  The new model was expected to provide more accurate in?year allocations compared with the previous system, which often lagged behind actual participation.

Reference was made to the consultation undertaken with Early Years providers on the proposed funding changes, including the Government’s increase in the pass?through requirement from 96% to 97%.  Feedback from providers had been generally supportive of the proposals.

Attention was also drawn to the draft Early Years budget for 2026/27 as set out in paragraph 6 of the report. 

As part of the next steps and in line with statutory requirements, all Early Years providers would be informed of their confirmed base rate by 28 February 2026.

Forum Members went on to discuss the use of the EY Journal Tool within the ISG Tier 2 and Tier 3 processes. The methodology for Tier 3 funding distribution was currently under review, with a finalised approach still to be confirmed.  Tier 2, which covers low and emerging needs, was aligned with government guidance, and the local approach is designed to move increasingly towards this national position.

Forum Members noted that only four maintained schools had responded to the consultation and expressed concern regarding the low response rate. Although all schools with Foundation Stage 1 provision had been contacted, the reasons for the low level of response remained unclear. The local authority confirmed that substantial efforts had been made to promote the consultation, including four virtual information sessions and engagement through cross?sector groups.

The Early Years team was commended for the quality of its service; however, Forum Members remained concerned about the low level of school engagement with the consultation and agreed that the approach to issuing future consultations should be reviewed to improve participation.

Resolved:

That the Schools Forum:

1. Noted the provisional DSG funding settlement for the early years block for Rotherham for 2026/27.

2. Noted the proposed arrangements for allocating the early years funding to providers for 3 & 4 year olds, 2 year olds and under 2’s.

3. Endorsed the proposed early years funding rates to providers for the 2026/27 financial year.