Early years entitlements for funded childcare providers

A two year old can get free early education and childcare if they live in England and if the parent/carer gets one of the following:

• Income Support
• income-based Jobseeker’s Allowance (JSA)
• income-related Employment and Support Allowance (ESA)
• Universal Credit - if you and your partner have a combined income from work of less than £15,400 a year after tax
• tax credits and you have an annual income of under £16,190 before tax
• the guaranteed element of State Pension Credit
• support through part 6 of the Immigration and Asylum Act
• the Working Tax Credit four-week run on (the payment you get when you stop qualifying for Working Tax Credit)

A child can also get free early education and childcare if any of the following apply:

• they’re looked after by a local council
• they have a current statement of special education needs (SEN) or an education, health and care (EHC) plan
• they get Disability Living Allowance
• they’ve left care under a special guardianship order, child arrangements order or adoption order

Two year old children in low income families are now able to take up a free place when their parent(s) have one of the following types of immigrations status:

• Zambrano carer (derivative right to reside in the UK under European law as the primary carer of a British child or dependent adult)
• Leave to remain with no recourse to public funds (NRPF) granted on family or private life (Article 8) grounds
• Been refused asylum in the UK and receiving support from the Home Office under section 4 [2] of the Immigration and Asylum Act 1999
• Parents who are Zambrano carers or who have leave to remain with NRPF, must also be able to demonstrate that they have a low income.

Parents must apply and check their eligibility for the two year old entitlement using an online application form.

Or face to face support is available from the Gateway Centres and by telephone 0161 778 0384 Option 2.

Children are eligible to receive the early years funding from the start of the term after their second birthday until the child qualifies for free funding as a three year old, even if the family’s circumstances change. 

Parents cannot apply before the start of the funding period in which the child’s second birthday occurs.

Following a successful application, the childcare provider will need to see a Salford eligibility voucher before a funded place can be offered. Please note the only evidence you can accept to offer a funded place is the Salford eligibility voucher. You are not able to accept a reference number or code or another local authority’s confirmation. Any parents who cannot produce the Salford eligibility voucher should be asked to contact the Starting Life Well service on 0161 778 0384 or email slw@salford.gov.uk

Free early education and care available to all three and four year olds the term after their third birthday until they start reception class.

15 hours per week 38 weeks per year is available and this can be stretched out to include holiday periods - although this can only be done from the beginning of each new term.

Parents/carers should contact their chosen nursery/childminder to arrange a place.

A three or four year old can get the extended entitlement of up to 1,140 hours of funded childcare, if the parents meet the following criteria:

• They earn or expect to earn the equivalent to National Minimum or Living wage over the coming three months
• This equates to £120 a week (or c. £6,000 a year) for each parent over 25 years old or £112 to £180 a week (or c. £5,800 a year) for each parent between 21 and 24 years old.
• This applies whether you are in paid employment, self-employed or on zero hour’s contract.
• The parent (and their partner where applicable) should be seeking the free childcare to enable them to work.
• Where one parent meets the income criteria and the other is unable to work because they are disabled, have caring responsibilities or have been assessed as having limited capability to work.
• Where a parent is in a ‘start-up period’ (i.e. they are newly self-employed) they do not need to demonstrate that they meet the income criteria for 12 months.
• If a non-EEA national, the parent must have recourse to public funds.

Parents must apply for the extended entitlement hours through the Childcare Choices website.

If parents are eligible, they will receive an 11 digit code to take directly to a participating childcare provider. Childcare providers must then gain written permission to verify the code with the local authority (parent agreement form below).

Once verified, a place can be confirmed for the funding period.

The entitlement is available over 38 weeks, term time only, or taken over the entire year, e.g. to include holiday periods too, flexible or stretched.

Parents should apply when the child turns three to ensure government funding is available the following term.

The Early Years Pupil Premium (EYPP) is additional funding for early years providers to enhance the education they provide for disadvantaged three and four year olds.

Children must receive free early education in order to attract EYPP funding. They do not have to take up the full 570 hours of early education they are entitled to in order to get EYPP.

Providers will receive an additional 68p per hour, applicable to 15 hours funding for eligible nine months plus (from September 2024), Two Year Old Funding and universal hours for Three and Four Year Old Funding.

Providers must submit data on parent/carers, including their name, date of birth and national Insurance or NASS number for a check to be done. This data is submitted via the Capita Provider headcount portal. Data can be gathered via the parent declaration form (below).

Get more information on the Early Years Pupil Premium (EYPP) and how to claim this additional funding.

Provider funding agreement 2018/2019 (downloadable document below) 

The agreement for the funding of free early years provision for two, three and four year olds sets out the expectations between Salford City Council and the provider and refers to early years provision free of charge (sections 7 and 7A of the Childcare Act 2006) and free childcare (section 2 of the Childcare Act 2016) as the ‘free entitlement(s)’ or ‘free hours’ or a ‘free place’.

This agreement has been written using guidance from the:

• Early education and childcare; statutory guidance for local authorities (June 2018)
• Early years entitlements: operational guidance for local authorities and providers (June 2018)

and is based on the:  

• Model Agreement: Early Years Provision free of charge and free childcare (June 2018)

Documents are available at the bottom of the page. 

The agreement applies to the 15 hours entitlement for the most disadvantaged two year olds, the 15 hours entitlement for working parents of three and four year olds (the universal entitlement) and the additional 15 hours entitlement for working parents of three and four year olds (the extended entitlement, 30 hours).

In addition to these:

• Disability Access Funding (DAF) and Early Years Pupil Premium (EYPP) are available for three and four year old children who are eligible. 

The Provider funding agreement is for:

• Local authorities
• Early years providers registered on the Ofsted Early Years register;
• Childminders registered with a childminder agency that is registered with Ofsted;
• Independent Schools and Academies taking children age two and over and which are exempt from registration with Ofsted as a early years provider. 

The parental agreement (downloadable document below) is for:

• Early years providers
• Parents

The council and the provider have agreed to enter into this agreement in order to provide free entitlement places for two, three and four year olds.

Rates from April 2024 to March 2025

Early years providers are funded to provide childcare at the following rates:

Nine months plus

• Term after nine-month anniversary: £10

Two year old funding

• Families on low-income funding stream: £7.35 plus £0.50p Deprivation Supplement
• Working Families funding stream: £7.35

Three and four year old funding

Each childcare setting is provided with their hourly rate and indicative budget at the start of the financial year, April.

• Base rate: £4.83

Supplements for three and four year old funding:

Deprivation: Calculated using the average IDACI score for all children attending each setting

Quality: 

Graduate Leader Supplement: £0.25p 

Applicable if a member of staff holds a level 6+ qualification (degree level) in childhood studies and works with eligible funded three and four year olds within the provision for a minimum of 15 hours per week, 38 weeks per year.

Qualified Teacher Status (QTS): £0.30p

Applicable if a member of staff holds a Qualified Teacher Status qualification in early years or primary and works with eligible funded three and four year olds within the provision for a minimum of 15 hours per week, 38 weeks per year.

EYPP funding: Applicable to 15 hours universal funding for eligible funded children - £0.68p 

To offer the Early Years funding for two, three and four year olds a provider must be:

• An early years provider other than a childminder registered on the Ofsted Early Years register;
• A childminder registered on the Ofsted Early Years Register;
• A childminder registered within a childminder agency which is itself registered with Ofsted or;
• Schools taking children age two and over and which are exempt from registration with Ofsted as an early years provider

What do I need to do?

1. Agree to the terms and conditions set in the funding agreement annually.

Each term you will need to:

2. Check that children are eligible for the Early Years Funding and complete a parental agreement form with parents. The parental agreement provides you and the parent with a document which clearly shows the agreed hours or sessions that the child should attend and the notice period to be served. This helps to protect everyone if there is a dispute, particularly one that involves money. 
3. Complete a headcount claim through the Provider Portal
4. Make amendments for any children that have joined or left during the term
5. Inform Starting Life Well service if you are unable to meet the conditions of the agreement. This will not necessarily affect the continuation of the service and Salford City Council may be able to offer support to enable it to continue. 

The parent contract form, which is available to download below, is to be completed with the parent and for your records; it does not need to be returned to the service. The timetables, which are also available to download below, contain two tabs, one showing the timetable and the second tab has key dates for processing the two, three and four year old funding via the Provider Portal.

Related children

Early education and childcare provision is defined in the Childcare Act 2006. This definition of childcare specifically excludes care provided for a child by a parent or step-parent (or other relative). 

As set out in section 18(4) of The Childcare Act 2006, a relative includes:

• a parent or step-parent of the child
• a person with parental responsibility for the child
• a relative of the child, including a grandparent, aunt, uncle, brother or sister, whether of the full blood or half blood or by marriage or civil partnership (e.g. a stepbrother, stepsister and uncle/aunt/grandparent through marriage)
• a person who is a local authority foster parent in relation to the child
• a person who is a foster parent with whom the child has been placed by
• a voluntary organisation
• a person who fosters the child privately.

Please complete the two, three and four year old funding non-attendance form. 

The Early Years Census return (EY Census) is an annual return which has to be completed every January. The Department for Education (DfE) requires every Childcare Provider who is claiming funding for a two, three or four year old to complete this return. The EY Census return is in two parts. 

Part 1 is Child Data which is collected via the Provider Portal Headcount module and

Part 2 is Establishment Data which is also collected via the Provider Portal Self Update Module.

Full guidance is issued annually (mid December). A guide is available to download below. 

Please note a childcare provider who is on the approved funding list is only required to complete the Early Years Census Return if they have or will have a funded child.

Salford City Council has been selected among other 19 Local Authorities to implement a staff retention scheme with some incentives in order to increase the number of staff in their childcare settings.

Salford plan to support approximately 150 incentives across the city, We have already allocated some of them in the first and second round of applications to those settings participating in the pilot scheme. The deadline for the next and final rounds will be 5 July and 6 September.  

This is costed as follows:

• £1,000 per recruit meeting the criteria 
  £520 on costs per recruit (tax/ National Insurance (NI)/ employer NI/ apprentice levy etc)
  £76 per incentive Local Authority administration fee (to support the program delivery)
• Bringing the total cost of each incentive to £1,596 per position 

Salford Council will ensure the full section 31 grant of £242,162 will be spent as described in the table below, we will monitor the number of allocated incentives and if take up is not as described, we will work with the sector to further promote and allocate incentives. 

Eligible individuals are those who are:

• applying for their first role at an early years provider required by section 40(2) of the Childcare Act 2006 to implement the early years foundation stage - other than a childminder or a reception class, or
• returning after a break of at least six months, and
• have secured a role which involves directly working with children for at least 70% of the time, and
• are employed by a provider named in a delivery plan agreed between the LA and DfE as part of the pilot.

Returners

Returners are defined as those who left the profession at least six months before they applied to rejoin. Anyone who left the profession less than six months before they applied to rejoin will not be eligible for an incentive.

Apprenticeships

An apprentice who gains a position in the same EY setting as they carried out their apprenticeship would be eligible to receive an incentive when they move from being an apprentice to an employee.
In order to receive an incentive, apprentices must have passed their apprenticeship and be taken on in a permanent role.

Salford will request evidence from providers on the number of posts advertised, number of applicants for each post, start dates, working patterns and payment to individuals as part of the evaluation returns (Salford will develop an evaluation form to ensure all relevant details are captured, this will be developed one the DfE/Evaluation team have been clear on the detail needed), this will be written into the agreement with settings.

If you are interested in taken part in this early years financial pilot scheme or need more information please send an email to slw@salford.gov.uk or nursery.funding@salford.gov.uk