Early Years Funding Explained
15 and 30 hours government funding for 2-, 3- and 4-year-olds
Early Years Funding
In the UK, some of the early years providers that are Ofsted registered can provide early years education for free to children that are 3-4 years old, and for some 2-year-olds.
What’s important to note about Early Years Funding is the fact that providers are paid by local authorities, which makes preschool funding and nurseries funding a lot more straightforward than other types of funding.
Watch the video to learn more about early years funding and why the current system isn’t working!
How are these early years funding rates determined?
Rates are determined according to the EYNFF, also known as the Early Years National Funding Formula. The authorities need to ensure that they provide all the funding hours accordingly. The government already created a model agreement between providers and authorities. This helps maintain consistency, while allowing for adequate rates.
Find out the current early years funding rates for your area here.
How does Early Years Funding work?
The Early Year Funding system was first added in 2017, and the idea was to ensure that the Early Years Funding is shared adequately across the entire country.
The EYNFF helps allocate funds for the 15 or 30 hours entitlement for working parents. The EYFS funding ensures providers are paid fairly.
How is Early Years Funding allocated?
Funding for nurseries is allocated based on 3 factors.
Firstly, there is a universal base rate for funding, which allocates 89.5% of all funds.
Secondly, there’s an additional needs factor that will showcase extra costs related to support children with a variety of needs.
- 8% of the formula covers kids eligible for free school meals,
- 1% covers kids with disability living allowance,
- 1.5% covers kids that speak English as an additional language.
Thirdly, there’s also an area cost adjustment, whose focus is to reflect the various childcare costs in different parts of the country. This is calculated via the average staff costs, and also covers the ratable nursery premises values.
All local authorities need to pay the universal base rate to childcare providers, and it will need to be multiplied based on how many hours of attendance are requested.
How much are childcare providers paid?
You can find out the current amount paid to childcare providers in your area by clicking here.
However, the important thing to keep in mind is that every authority will choose the amount due to providers, so it can vary quite a lot based on location and other factors.
Are all providers in the same area paid the same early years funding rate?
Yes, since the local authority sets the amount paid for the area based on the factors above. This means a child that’s in a PVI setting has the same rate when compared to the child in a primary school nursery class or childminders.
An important thing to keep in mind is that local authorities are also allowed to top up base rates with various funding supplements. One thing to consider here is the fact that these are capped to the 10% of the hourly rate.
All local authorities can have a deprivation supplement, and they get to choose what four supplements they can use and how to use them.
How often do childcare providers get paid?
Again, this is dependent on the local authority.
Some are paid on a monthly basis others are paid each term.
With that being said, providers will be able to request an alternative payment method as needed. This can be discussed with their local authority and set up accordingly for upcoming payments.
Conclusion
The early years funding system can be very useful for parents and childcare providers.
It’s a great EYFS funding system and it truly stands out with its value and quality. It allows nurseries, childminders and other childcare providers to get paid adequately, whilst also making sure that the entire system is fair and efficient.
Though, many childcare providers are not happy with the current funding system. Learn why in the video above.