Councils given flexibility with free childcare funding

The government has confirmed that councils will temporarily be able to use the funding they receive for the free entitlements for two, three and four-year-olds differently, redistributing it where necessary during the Coronavirus pandemic.

New guidance will be published to support councils with the steps they will need to take if moving around government funding between settings, where all other options have been explored and more childcare places are still needed locally for children for the duration of the Coronavirus outbreak.

The government has already confirmed it will continue paying free entitlement funding – worth £3.6 billion a year – to local authorities throughout the Coronavirus outbreak. Childcare businesses will also benefit from other support schemes, including a business rates holiday, the Small Business grant for those that don’t pay business rates, the Self-Employment Scheme and the Coronavirus Job Retention Scheme (CJRS).

The Department for Education published guidance to set out how the CJRS and free entitlement funding interact, confirming that early years providers can access the CJRS to cover the proportion of their income considered to have been paid from private income, such as parent fees. Any setting which sees their early entitlement funding reduced in order to fund childcare places elsewhere will be able to increase the proportion of their salary bill eligible for the CJRS.

In addition, to provide further support to early years settings who are staying open for vulnerable children and children of critical workers, providers will be given greater flexibility in meeting some of the requirements in the Early Years Foundation Stage (EYFS) framework. This is to manage expectations and reduce burdens during an unpredictable time for the sector.