In autumn 2017 when 30 hours funded childcare was implemented, the Government recommended that local authorities should pay providers monthly unless an alternative was agreed locally with the sector. Following a consultation at that time it was agreed that Lancashire would move to a nine-month payment model (i.e. three payments per term, paid in the first, second and third month of each term). In 2020, due to Covid, Lancashire temporarily changed the payment terms to one large up front interim payment, with a final balancing payment later in the term. This was implemented to ensure providers received funding on time/in advance to support cash-flow at a time when numbers were exceptionally low. In April 2021, a follow up consultation was undertaken to determine whether providers wanted to revert to the nine-month payment model or stay with the large interim/final balance payment model. The sector opted for the latter. In spring term 2024, the Council received feedback from a small number of nurseries and several childminders raising concerns about the payment terms. This was a particular concern for providers due to the increase in numbers of funded children from April 2024 onwards, and the resulting decrease in 'private' income. Several providers started to request monthly payments. Feedback suggested that the payment terms provided challenges for some providers, particularly childminders, and especially childminders that were in receipt of universal credit. The large interim payment up front means that they lose their universal credit entitlement the month the interim was paid as it took them above the universal credit threshold. Considering the expanded entitlements and feedback received, the Council undertook a consultation during March-April 2024 on the future payment models.
