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NEWS: Important update regarding spring term funding in England

Entitlements return to ‘normal funding process’

Yesterday, the Department for Education announced the funding allocations for early education entitlements for the upcoming spring term 2021 in England. Disappointingly, these will no longer be paid to local authorities at pre-pandemic levels and will instead return to the ‘normal’ approach based on a January 2021 census of the number of entitlement hours taken up by children in each local authority.

During the coronavirus pandemic, the DfE had made the decision to keep funding entitlements at pre-pandemic levels due to the continued low numbers of children attending early year settings.

Local authorities may be eligible for a ‘top-up’ of entitlement funding on a case-by-case basis. If a local authority has attendance below 85% of the January 2020 census which then increases in the spring term, the government will top-up to fund these additional places. This funding would be limited to an equivalent to 85% of their January 2020 census.  

New funding rates for 2021-22

The DfE also announced new funding rates for 2021-22 which takes into account the 1.2% percent increase promised in the 2020 Spending Review. This equates to a rise of just 6p per hour for three- and four-year-olds and 8p per hour for two year old funding.

Sue McVay, Director of Membership & Services at PACEY comments:

“PACEY, alongside its members has been desperately waiting for this announcement and it comes as a huge disappointment that DfE will not be extending its support into next term.

The announcement comes at a time when early years providers are still struggling to recover from the impacts of the pandemic, with reduced demand for services and increased costs to make their settings covid-secure. The meagre increase in funding rates of just a few pence per hour per child will not go far enough in covering these costs, instead placing more settings into deeper financial difficulty.  

Our young children deserve the highest quality of early years provision, which is only possible if the government provides adequate funding; not only in supporting settings to keep their doors open over the coming months, but also through a long term commitment to investing in our children’s futures.”

PACEY will continue to support our members with information on the spring funding process which will be shared shortly.