Nurseries and childminders will be paid a flat rate of funding for two-year-olds

Places will be targeted at outstanding and good nurseries and on average local authorities will receive £5.09 per child per hour.

Elizabeth Truss, education and childcare minister, is urging local authorities to ensure that the full rate is passed on to providers and reaches the frontline.

Nurseries and childminders will receive a flat rate of funding to offer places to two-year-olds, based on their area’s average costs.

In future, local authorities will be funded based on the number of children that are actually using the places, on what the Department for Education called, ‘a use it or lose it’ basis. This means that local authorities not deemed to have ensured that parents are taking up their places will receive less money.

A breakdown of the funding allocations that each local authority in England will receive to provide two-year-old places in 2013-14 has also been published on the department’s website.

Details of how much each local authority has spent will be published on the Department for Education’s website so that providers will be able to see whether the full funding allocations have been passed on to them.