Question to the Department for Education:

To ask Her Majesty’s Government whether county councils are required to pass on to registered and approved providers 100 per cent of government funding allocated for childcare.

Funding for the early years entitlement is underpinned by the School and Early Years Finance Regulations. Local authorities receive funding from central Government to deliver the early years entitlements through the Dedicated Schools Grant (DSG), which also includes the budgets for schools and high needs. The current regulations do not require local authorities to pass on all early years funding to their providers. Local authorities, in consultation with their Schools Forum, are responsible for deciding how best to distribute the funding across their locality. The current regulations do allow local authorities to hold back some funding from the DSG for central services.

However, when the two year old entitlement was introduced there was an expectation for local authorities to pass all available funding to providers for delivering two year old places.

Under the early years funding reform proposals on which we recently consulted, there will be a requirement for local authorities to pass on at least 93% (in 2017-18) and 95% (thereafter) of their early years budget directly to providers for delivering the three and four year old entitlement. We are currently considering responses to the consultation.