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POLICY: Update on local authorities holding back funding and paying monthly

Since the expansion of the entitlement scheme was announced in last year’s budget, the opening of the £600 start up grant in November and in the run up to the first phase of the expansion in April this year, PACEY has been inundated with requests to support Childminders who have been experiencing difficulties in receiving funding payments. 

In February, PACEY carried out a survey to gather data and examples of which local authorities (LAs) refuse to pay funding and for what reasons, for us to take these examples to the Department for Education (DfE). Current childminders and those looking to join the profession have been telling us how their local authorities have been refusing to pay part or all of the funding for a number of reasons including: 

  1. LAs refusing to pay funding to newly registered Childminders until at least their first Ofsted inspection. 

  1. LAs refusing to pay funding because of an Ofsted grading. 

  1. Refusal to pay quality payments or severe delays in childminders receiving quality payments. 

  2. Where the provider has not completed a sufficiency survey. 

  3. LA’s paying funding termly instead of monthly. 

PACEY has been meeting with DfE to discuss these issues and and determine next steps for those Childminders affected. 

  1. Local authorities holding back funding until a Childminder’s first  Ofsted Inspection 

Local authorities should not be holding back funding until first inspections, this is clear in Early education and childcare statutory guidance for local authorities:  

A3.4 Fund places for two-, three- and four-year old children at new providers registered with Ofsted until the provider’s first full Ofsted inspection judgement is published or at a childminder registered with an agency until the agency’s first full Ofsted inspection judgement is published if a parent wants their child to take up their free place at that provider and the provider is willing to accept the local authority funding and any other local authority requirements (see also A4.8). 

It will also be in paragraph A3.4 of the new version of the guidance, which applies from 1 April. This requirement is underpinned by Regulation 45 in  the free entitlement regulations  The Childcare (Free of Charge for Working Parents) (England) Regulations 2022 No. 1134 (       

DfE will be looking into these cases but in the immediate term they are advising providers to write/ email to a senior decision maker in the local authority in question. PACEY would suggest the Director of Children’s Services. PACEY would be happy to be copied into any emails, please use

2-4. Other reasons for local authorities to holdback funding 

Whilst we believe points 2-4 are still unlawful, we are waiting on DfE to confirm their stance on these matters and confirm next steps. PACEY will update our members and the wider early years community as soon as possible. In the meantime, we again advise any of those affected to write to a decision maker within the local authority. 

5. Local authorities not paying funding in monthly payments  

Claire Coutinho committed to make LAs pay childminders monthly (Minister urges social landlords to open the door to childminders - GOV.UK (, and DfE expectations are set out in the existing statutory guidance:  

Local authorities are responsible for paying providers to deliver the free early education and childcare entitlements. The early education and childcare statutory guidance states that local authorities should pay all providers the full amount owed to them monthly unless they have good reason not to do so, for example, if, after consultation, most providers opt for an alternative method of payment. The guidance also states that local authorities should be mindful of the cash flow concerns of smaller providers, particularly childminders, when making decisions about payment methods, and that local authorities should regularly review how they pay providers to ensure they continue to meet the needs of all providers in their area

If you are still affected by your local authority not paying funding monthly, please write to a decision maker within the local authority asking for what reason they are not paying monthly. We would also like to hear from you, please email with their response or include us in the original email to your local authority. 

PACEY policy work 

At such a crucial time for the sector, PACEY is working hard on behalf of our members to improve working conditions for Childminders: 

  • Campaigning for related children to be included under the funded entitlement scheme. 

  • Challenging DfE and local authorities where funding has been unlawfully withheld. 

  • Highlighting the issues of moving Childminders from Tax Credit to Universal Credit impacting their income and working with DWP to treat Childminders differently. 

  • Continuing to urge housing associations, social landlords and developers in England to allow childminders to work in their rented properties that have restrictive clauses in contracts which stop them from working in their homes. 

  • Making sure Childminders play a pivotal role in the Governments wraparound scheme.