Funding and local authority updates
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RESOURCES
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1 January 2024
The Department for Education has published an updated version of the statutory guidance for early education and childcare, which outlines how the early entitlement offers - including the new offers for one- and two-year-olds - must be delivered.
The guidance includes information on:
- who is eligible for the entitlement offers
- when eligibility comes into effect for different age groups
- details on the grace period, if parents fall out of eligibility
- the rules on additional fees and charges
- the rules on how funded sessions can be delivered
The DfE has also published a model agreement template, available
29 November 2023
The Department for Education has confirmed local authority funding rates effective from April 2024 to March 2025. Please note these are average funding rates for councils - frontline provider rates will be confirmed by individual local authorities, no later than 31 March 2024.
Local authorities in England will receive an average three- and four-year-old funding rate of £5.88&Բ;from April 2024, an average increase of 4.7% compared to September 2023. Individual local authority rates are available here. All local authorities will receive at least a 1% increase in three- and four-year-old funding compared to September 2023.
They will receive an average two-year-old funding rate of £8.28&Բ;from April 2024. Individual local authority rates are available here. Again, these are average rates for councils only – rates for frontline providers will be confirmed by local authorities by 31 March 2024.
Local authorities will receive the same two-year-old funding rate for both disadvantaged two-year-olds and two-year-olds from eligible working families from central government. However, they will have the option of applying two different rates to these two groups within their local area, as long as the rate for disadvantaged two-year-olds is not lower than the rate for two-year-olds from eligible working families. They will also receive an average under-twos funding rate of £11.22&Բ;from April 2024. Individual local authority rates are available here.
The government has also published its response to its consultation on funding for one-and two-year-old offers and confirmed that the funding formula for children aged two and under will be largely based on the existing Early Years National Funding Formula for three- and four-year-olds (i.e. where a local authority's funding rate is based on how expensive it is to deliver places in that area); The same supplements will be the same as those currently used for the three- and four-year-old offer, though the deprivation supplement will not be mandatory for one- and two-year-olds; There will be a requirement for local authorities to pass on 95% of funding to providers, with a view to increasing this to 97% when the new entitlements are bedded in (no specific date has been given for this).
21 July 2023
The Department for Education (DfE) has published a new consultation on the early entitlement offers for one and two-year-olds, alongside illustrative local authority funding rates set to come into effect from 2024/25
7 July 2023
The government has announced Local Authority funding rates for September 2023 to March 2024. The rates will include an hourly uplift to incorporate the £204m funding increase, now known as the early years supplementary grant, announced by the government in the Spring Budget, and forms part of government plans to expand the 30-hour-offer to children aged nine-months onwards from September 2025. The published rates include the two, three and four-year-old offer
15 March 2023
As part of 2023 Budget, the government announced the expansion of the existing 30-hour-offer to children from nine-months to two-years, and an uplift on funding to the existing early entitlement offers:
- £4.1bn to be provided by 2027-28 towards the expansion of new free hours (covering children from nine months to two years0
- £204m funding in 2023, increasing to £288m by 2024-25
- Childminders who registers with °ϲʹ will also receive a start-up grant of £600, and those who register with a childminder agency will receive £1,200
- Within the Budget the Chancellor also announced plans to pay to pay for childcare/early years via Universal Credit upfront instead of in arrears. Parents will now receive up to £951 for one child and £1,630 for two children per month
16 December 2022
The Department for Education has published announced the local authority funding rates for 2023/24 the two-year-old offer and the three-and-four year-old offer which include a £20 million overall increase intended to reflect the pending increase in the National Living and Minimum Wages.
You can view a full list of individual local authority funding rates for 2023/24 .
The DfE also responded to a recent consultation on early years funding formula changes, which launched earlier this year.
The consultation response confirmed that the DfE is implementing a number of changes to the early years national funding formula in line with the original consultation proposals. This includes:
- Year-to-year protections: The DfE has confirmed that all local authorities will see a funding increase of no less than 1% for both three- and four-year-old, and two-year-old, funding.
- Minimum funding floor: In addition, the DfE will be applying a minimum hourly funding rate (called a minimum funding floor) of £4.87 for three- and four-year-old funding, up from the current £4.61.
- Gains cap: To pay for the year-to-year protections, the DfE is proposing to introduce a gains cap (i.e. a limit on how much a local authority’s funding can increase by) of 4.9% for three- and four-year-old funding and 10% for two-year-old funding.
4 July 2022
The Department for Education launched a consultation on proposed changes to the Early Years National Funding Formula, specifically on the funding formulas that the DfE currently uses to determine what proportion of the overall early years funding pot each local authority in England receives.
The aim of the formula is to ensure that the level of funding each area receives accurately reflects how expensive it is to deliver early education and care in that area.
The consultation ran from 4 July 2022 to 16 September 2022.
Download the Early Years Alliance’s guidance to the funding consultation proposals
26 January 2022
The Alliance has had it confirmed by the Department for Education that the early years funding settlement amounts as set out in the Spending Review 2021 are as compared to the 2020/21 baseline, and are not cumulutive, meaning that after the 17p increase in the 30 hour offer funding comes in this April, spending on early entitlements will rise by just £10 million for 2023/4 and fall again by £20 million in 2024/5.
The Department wrote "The investments in 2022-23, 2023-24 and 2024-25 are all individually in comparison to the baseline for the current year 2021-22.” Neil Leitch, CEO of the Early Years Alliance said he was "incredibly concerned" by the news.
The Early Years Alliance continues to challenge government on the extent of the underfunding of the early entitlements. Since April 2021, it has also been in the process of seeking data behind the government's claim that the £44 million settlement it was awarded for the year 2022/21 will, as stated by former Minister for Children, Vicky Ford MP "pay for a rate increase that is higher than the costs nurseries may face from the uplift to the national living wage in April" including the cost of extending the national living wage rate to 23- and 24-year-olds.
20 January 2022
The Department for Education has published supplementary guidance on the January 2022 early years census, in light of the impact of Covid-19 on settings:
The census is used by the government to determine how much funding is given to different local authorities, The guidance for January 2022 remains broadly the same as for January 2021.
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- An Alliance summary of the guidance is available here: Early years census 2022: a summary
25 November 2021
The Department for Education has now published the local authority early years funding rates for 2022/2023, and changes to the early years pupil premium (EYPP) rate for the same period.
The rate paid to councils for three- and four-year-old early entitlements s will increase by 17p per hour across most areas, while rates for two-year-olds will increase by 21p per hour, with the minimum rate any council could now receive from central government at £4.61 per hour. It is important to note this represents the hourly funding rates given to local councils not the final rate paid to individual providers.
The government has also confirmed that the EYPP will rise for the first time since its introduction by 7p, to 60p per hour. Disability Access Funding will increase from £615 to £800 per child.
New rates apply from 1 April 2022. View rates for individual LAs here:
- (tab 2 and tab 3)
Changes to local funding formulas for early years settings must be published by local authorities no later than 31 March 2022.
28 October 2021
Following yesterday's Spending Review, Children and families minister, Will Quince published funding rates for the early years sector over the next three years:
- £160 million in 2022/23
- £180 million in 2023/24
- £170 million in 2024/25
The funding is specifically to increase funding rates for the early entitlement offers and the rates apply from the start of the financial year, i.e. the £160 million in additional funding for 2022/23 will be allocated to the sector as of April 2022.
- Spending review document (see 4.14):
13 January 2021
The Department for Education (DfE) has confirmed that the January early years census determining early years funding for local authorities for the spring term, should be completed on the basis of the number of children registered for places, rather than in attendance, even if the parents chooses to keep their child at home during the national lockdown.
It has also announced that local authorities who find that children accessing the early entitlements is significantly higher than anticipated will be able to apply to the DfE for 'top-up funding'.
The guidance for local authorities is available here:
17 December 2020
The government has confirmed that the 1.2% rise in early years funding rates for the financial year 2021/22 will equate to just 6p or 8p per hour per child for local authorities.
At the same time, the Department for Education has also announced that funding for the government’s early years schemes will no longer be paid to local authorities at pre-pandemic levels, and instead local authorities “should return to the normal funding approach” This means funding for the spring term will be paid on the basis of the January 2021 census.
Additional guidance for local authorities about funding during the spring term 2021 is available here:
21 June 2018
The Department for Education has published updated versions of both its for local authorities and providers, and its for local authorities. °ϲʹ can download the most up to date version of the guidance here: