On 20 July, the Department for Education (DfE) issued revised guidance on the funding of local authorities and early years providers for the early education entitlements during the coronavirus pandemic. It sets out government’s commitment to continue paying local authorities over the autumn term, for the early education places they usually fund. This gives another term of secure income to all early years settings who are open for the children who need them.

The guidance sets out that local authorities should continue to fund early years providers who are open and offering their usual entitlements places at broadly the levels they would have expected to see in the 2020 autumn term had there been no coronavirus outbreak. This means that even if providers are open, but caring for fewer children as a result of low demand from parents, they can continue to be funded as if the coronavirus pandemic were not happening.

In addition, local authorities should continue to fund providers which have been advised to close, or left with no option to close, for public health reasons. But, local authorities should not fund providers who are closed in the autumn term for non-public health reasons.

To make sure local authorities have sufficient funding to support providers during the autumn term, DfE has made an exception this year to the way they normally allocate early years funding to local authorities. By exception, they intend to use the January 2020 census data for funding allocations to local authorities for the autumn term 2020. This means local authorities will be paid in autumn 2020 for the number of children who were receiving the early education entitlements before the pandemic began. Local authorities are also expected to pass that support onto providers who are open, but may not be as full as usual.

The DfE intends to return to the normal early years funding process from the start of 2021. This means they intend to use the January 2021 census count to drive funding allocations for the 2021 spring term. It is also DfE’s expectation that local authorities’ funding to early years providers will return to the normal approach (that is, ‘funding following the child’) for all providers from 1 January 2021. However, this will be kept under review and the final approach will be confirmed in the autumn.

Detailed guidance is available here.