Government will fund 26 weeks for under twos costing around £120 million

The DfE confirmed to NDNA in a meeting yesterday that they would be adding an additional £120 million approximately to the overall funding allocation for the under twos entitlement from September 2024.

This additional money was because some local authorities would be funding 26 weeks for the autumn 2024 and spring 2025 terms, rather than the 22 which had been originally allocated. This is due to the way school holidays fall in some local authorities.

In order to treat all local authorities equally, the DfE will be funding ALL local authorities for 26 weeks of funded places for those two terms.

Purnima Tanuku OBE, Chief Executive of NDNA said: “This announcement is extremely last minute, why has this issue only just been discovered? While we welcome the DfE’s response in supporting all local authorities to be able to fund 26 weeks for these two terms, nurseries have been suffering from underfunding for years. They have repeatedly been told that there is no more money. And yet the DfE says they will fund ‘however much it ultimately costs’. Suddenly the Government seems to have found £120m of extra funding to enable this.

“It’s vital that all this money is passed onto providers. We know from our investigations into early years entitlement funding that many local authorities put millions of pounds of underspends into their contingency budgets or reserves rather than increasing the funding rate to providers if they have money left over. NDNA uncovered £229m in unspent funding between 2018 and 2022.

“This highlights that the whole funding system is not fit for purpose and urgently needs reviewing. It’s been set up in a way that’s so complex that neither the Government nor local authorities appear to have a full grasp, so how are parents and providers expected to know how it works and whether they are getting a fair deal?

“These issues need to be addressed urgently if this policy is to work. The Prime Minister was quoted saying there are some practical issues but the sector is able to deliver this. But it’s the providers who have to make this decision based on what funding they will receive from their councils and what staffing requirements they will need.”

NDNA has pushed with the DfE the urgency for local authorities to confirm to nurseries and other providers what their funding rates will be for April 2024.

  • England

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