An investigation by CYP Now reveals the extent to which local authorities retain an allowance of up to five per cent of their early years budgets to offset costs in key areas such as staffing, support for families and administration around the funded childcare offer.
Current Department for Education rules allow local authorities to retain up to five per cent of their early years budgets to fund “relevant expenditure” including administration around funded childcare hours for three- and four-year-olds, support for children with special educational needs and disabilities (SEND) and training for the early years workforce.
However, the DfE has revealed plans to slash the retained funding allowance for local authorities to three per cent from April next year, increasing the amount they are obliged to “pass through” directly to providers from 95 to 97 per cent of early years funding streams.
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