Since 2017, the Government has used the Early Years National Funding Formula (EYNFF) to calculate the amount of money that is passed to each local authority to pay for the funded hours to which three- and four-year-olds are entitled. Local authorities then decide how much specific settings in their area will receive. This formula aims to ensure local authorities with children who may need more support receive more funding, as do those areas where businesses are more expensive to run.
The EYNFF draws on a range of information to calculate funds, including local salaries and business rates, the proportion of children with special educational needs in a local authority area, the number of children eligible for free school meals, the number of children who claim Disability Living Allowance and the number of children with English as an additional language.
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