Nursery World - Early Years National Funding Formula: DfE plans major shake-up of early years funding

Plans to change the way that childcare for three- and four-year-olds is funded to make the system fairer for all early years providers, wherever they are in the country, have been put out for consultation today.

The Department for Education acknowledges that the current system is not working and says that the majority of 30-hour places will be provided by the private and voluntary sector, which needs to be incentivised to offer them.

The consultation proposals therefore aim to address the historic disparities in levels of local authority funding that have led to some settings receiving as little as £3.24 and others £9.17 an hour per child.

Childcare providers in each local authority area will receive the same basic rate of funding for every hour of the free entitlements.

The new early years national funding formula that will replace the current system will be made up of three funding factors:

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