education places for two-year-olds are funded.
From the 2015-16 financial year, the Department for Education (DfE) wants to move away from funding the free entitlement on estimates of the number of children who are eligible for a free place and use participation-based funding instead.
This will mean that the DfE will fund local authorities according to the actual numbers of eligible two-year-olds taking up a place, the same way that three- and four-year-old places are funded.
Places would be funded on the basis that a two-year-old is taking up the full 15 hours entitlement a week, the part-time equivalent (PTE) of 570 hours a year.
If two eligible children between them are taking 15 hours, this equals funding for one place (see diagram).
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