However, early years organisations have raised concerns that removing any flexibility around charges could seriously threaten early years settings’ sustainability.
To ‘ensure no family is priced out of the support they need’, the DfE has today (21 February) updated its guidance for local authorities on how the funded hours should be delivered.
The
guidance makes clear that early years providers should ensure parents are aware of any additional charges before taking up their child’s funded place, and that charges ‘must not be included as a condition for parents accessing their hours’.
It comes after the word ‘voluntary’ was removed from the guidance last year. The National Day Nurseries Association said that reintroducing the term ‘adds insult to injury for providers struggling with sustainability’.
The Early Years Alliance argued that the guidance does ‘absolutely nothing to address – or even acknowledge – the fundamental financial challenges facing the sector.’
The updated guidance states, ‘Parents must be able to opt out of paying for chargeable extras and the associated consumable or activity for their child.
‘Providers should be mindful of the impact of charges on families, particularly the most disadvantaged. Providers who choose to offer the free entitlements are responsible for setting a policy on providing parents with options for alternatives to additional charges. This policy must offer reasonable alternatives that allow parents to access the entitlement for free, including allowing parents to supply their own, or waiving the cost of these items.
‘In all cases, these chargeable extras must not be a condition of taking up a free place. All parents, including disadvantaged families, must have fair access to a free place. A local authority should intervene if a provider seeks to make additional hours, voluntary services or voluntary consumables a mandatory condition of taking up a free place.’
The guidance also makes clear that providers should publish the cost of chargeable extras on their websites or, where they do not have a website, on local authority Family Information Services.
‘Invoices and receipts should be itemised, it says, and local authorities should work with providers to ensure their invoices break down separately into:
- Free entitlement hours
- Additional private paid hours
- Food charges
- Non-food consumables charges
- Activities charges.
‘Local authorities should ensure these itemised invoices are in place by January 2026.’
The education secretary Bridget Phillipson said, ‘Today marks an important step towards an early years system that is accessible for parents, sustainable for providers, and better serves children’s development.’
The government has announced 'a targeted approach' to its next tranche of early years funding to support the sector to deliver the new places needed for parents of children from nine months old from September.
It includes a dedicated £75 million expansion grant, which the DfE claims is equivalent, on average, to an extra £80 per two-year old, and £110 per child under two, although it acknowledges that final amounts of funding reaching providers will depend on local circumstances.
Local Authority allocations for the £75m expansion grant will be confirmed before the end of February.
Purnima Tanuku, chief executive of the NDNA, warned that ‘taking away the flexibility for providers around charges could seriously threaten the sustainability of settings.
She said, ‘The majority of nurseries are already following best practice on being clear with parents about their offer and what any extra charges are, associated with the funded childcare offer.
‘The funding Government pays to providers has never been about paying for meals, snacks or consumables, it is to provide early education and care. In the current economic climate, taking away the flexibility for providers around charges could seriously threaten sustainability. This may lead to nurseries offering fewer funded places and further nursery closures.
‘Given that these changes could have a significant impact on nurseries’ ability to deliver funded hours, the Government should have consulted with parents and providers on the possible impacts of these changes.’
Neil Leitch, chief executive of the Early Years Alliance, said, ‘While today’s guidance may rightly make charges clearer for parents, it does not take away from the fact that unless the Government takes urgent action to tackle sector underfunding, many providers will still have no choice but to increase the price of any non-funded hours parents take up or optional extras they purchase – or risk facing permanent closure.
‘If the Government is as serious about ensuring that all families can access affordable care and education as it says it is, then it simply must tackle the root causes of rising early years costs. As we know from the past decade and beyond, ignoring the problem of underfunding won’t make it go away.’
Meanwhile, Lydia Hodges, head of Coram Family and Childcare, welcomed the clarification in the updated guidance.
'Our research shows that additional charges can be a major barrier to families - particularly disadvantaged families - taking up their funded early education entitlements,' she said.
'Supporting childcare providers through these changes will be essential, to ensure the sector remains stable, but this updated guidance is an important step towards a transparent system that allows parents to make informed choices about their childcare options and enables all children to access their entitlements, particularly those who stand to benefit the most from high quality early education.'
Councillor Arooj Shah, chair of the Local Government Association’s Children and Young People Board, said, 'We know that charging for consumables has made access to places more difficult for some families, with complex guidance making it difficult for councils to effectively challenge providers in this area. It is extremely helpful that guidance is now being clarified.
'Moving forward, we must make sure that both councils and providers are in a strong position to play their part in giving every child the best start.
'That includes using the Spending Review to fully fund early entitlements so that providers can deliver high quality early education to every child, and making sure councils have the right levers, powers and resources to manage local childcare markets for the benefit of all children and families.'
