The funding, earmarked for the financial year April 2020 to March 2021, should have been used to help providers struggling with reduced incomes and higher costs as a result of the Covid-19 pandemic, the NDNA said.
But its Freedom of Information (FOI) investigation instead uncovered millions of pounds of early years funding intended to deliver childcare places to two, three and four-year-olds that failed to reach childcare providers, it claims.
A huge proportion of this funding, which totalled £40m alone for places for three and four-year-olds, was left in designated schools grant reserves, it adds.
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