| answer text |
<p>The Government currently funds local authorities to deliver the government-funded
entitlements through the Early Years National Funding Formula (EYNFF) for 3 and 4-year-olds
and a separate formula for 2-year-olds. These have been designed to allocate our record
investment in early years entitlement funding fairly and transparently across the
country.</p><p>The EYNFF is made up of a universal base rate, (which is the same hourly
funding rate for every child in a local authority) plus funding factors for additional
needs, using measures of free school meals; disability living allowance and English
as an additional language. The formula also includes an area cost adjustment (ACA)
multiplier to reflect variations in costs across different areas of the country. This
uses the General Labour Market measure to reflect staff costs and a Rates Cost Adjustment
to reflect premises related costs. Each local authority’s EYNFF rate will vary depending
on their level of additional needs and their ACA values.</p><p>Following a consultation
in 2022, the department updated the funding formulae to ensure the funding system
remains fair, effective and responsive to changing levels of need across different
local authorities.</p><p>On 7 July the department announced that the additional £204
million funding for early years in 2023/24, announced at the Spring Budget in March,
will be distributed to local authorities via a standalone Early Years Supplementary
Grant (EYSG) from September 2023.</p><p>To recognise cost variations between local
authority areas, we have used the existing funding formulae for 2, 3 and 4-year-olds
(and using the same underlying weightings and data that were used to calculate the
2023/24 hourly funding rates) to determine the EYSG rates for each individual local
authority.</p><p>With the introduction of the new entitlements for working parents
of children aged 9 months to 2 years from 2024/25, we have recently finished consulting
on our proposed funding formula for distributing funding to local authorities, along
with the accompanying local rules for local authorities to follow when passing on
this funding to early years providers. That consultation closed on 8 September and
we will announce our response and confirm the final hourly funding rates for 2024/25
in the autumn.</p><p>We will ensure a phased implementation of the free hours offers,
to allow the market to develop the necessary capacity as well as continuing to explore
how we can support the sector to deliver the additional places that will be required.</p><p>We
will work closely with local authorities and providers to identify what needs to be
in place to support this significant expansion in childcare provision including capital
requirements as well as workforce.</p>
|
|
