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by Jess Gibson

A new  on the early entitlement offers for one- and two-year-olds has been published today by the Department for Education (DfE).

The consultation – running from 21 July 2023 to 8 September 2023 – has three core areas of focus:

• The formula used by central government to determine the amount of funding for children aged two and under allocated to each local authority in England.

• The rules around how much funding for children aged two and under is reserved for frontline providers by local authorities.

• Other streams of funding available to local authorities: early years pupil premium (EYPP); disability access funding (DAF); and special educational needs inclusion funding (SENIF).

Illustrative local authority funding rates have been published alongside the consultation and can be seen in the links . Under the proposals, some local authorities will see a fall in the level of funding received for two-year-olds compared to September 2023.

Final funding rates for the new funding offers are dependent on the outcome of the consultation. The final rates will be confirmed in the autumn, after the close of the consultation, and come into effect in 2024/25.

For more information, please see our FAQs page, which has been updated to reflect the information published in these consultations.

Commenting on the new consultation about funding distribution for the extended early entitlement offers for one- and two-year-olds, Neil Leitch, CEO of the Early Years Alliance, said:

“While we welcome further detail on how the entitlement offers for under-threes will be funded, the fact is if the central pot of early years funding is insufficient, then no matter how well it is distributed, those on the frontline are likely to lose out.

“With estimates from the Women’s Budget Group suggesting that the government has significantly underestimated the level of funding needed for both the new and existing offers, we remain deeply concerned that, regardless of what funding formula is used to, the decision to extend the early entitlement scheme will only serve to place even greater pressure on an already-struggling sector.

“It is also incredibly worrying that in the face of sharply rising delivery costs, under the government’s proposals, the introduction of this new formula will result in some local authorities seeing their funding rates for two-year-olds actually fall in April 2024 compared to September 2023. At a time when the government is trying to encourage as many providers as possible to take on more two-year-olds, this is completely counterproductive and so we urge the government to rethink this short-sighted approach."