Early Years National Funding Formula (EYNFF) – 2024-25 - consultation

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Consultation has concluded

Purpose

This consultation asks providers for their views on the following areas:

  • The funding principles for 3- and 4-year-olds under the Early Years National Funding Formula (EYNFF)
  • The funding principles for Two-year-olds and Under 2’s under the Early Years National Funding Formula (EYNFF)
  • The Special Educational Needs (SEN) Inclusion Fund and Deprivation funding proposed adjustments

Background and overview:

The Early Years National Funding Formula (EYNFF) for 3-and-4-year-olds was introduced in April 2017. Each year the Government publishes guidance setting out the overall framework, funding rates and expectations on local authorities in implementing the EYNFF.

Local authorities are required to allocate 95% of funding to providers since 2018/19

Local authorities are required to consult providers on annual changes to their local formula.

National rates advised by central government have increased for 2024-25. This includes increases for existing entitlements and newly introduced funding entitlements starting in April 2024.

All children in England and Wales are entitled to 15 hours of free nursery education per week, 38 weeks a year from the term after their third birthday until they reach statutory school age. Parents may choose to take this up in a maintained school, nursery or in a private, voluntary, or independent sector (PVI) early year setting or with a childminder.

Currently the Early Years Block within the Dedicated Schools Grant (DSG) funds the universal and extended provision for all 3- and 4-year-old children and the Early Years provision for disadvantaged 2-year-old children. Funding is also currently used to support the costs for children with emerging levels of Special Educational Needs.

The government extended the free entitlement to nursery childcare from 15 to 30 hours a week for working parents in September 2017. The aim was to reduce the cost of childcare for working families and break down the barriers to work, so that parents who want to return to work or work more hours can do so.

During the Spring 2023 budget announcements, the Chancellor set out large scale childcare reforms to increase availability, reduce costs and increase the number of parents using childcare. The budget announced a range of measures to support education and help parents with childcare using a phased implementation including:

Changes to entitlements, allowing eligible working parents to access 30 hours of free childcare from a younger age.

From April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare.

From September 2024, 15 hours of free childcare will be extended to all children from the age of nine months.

From September 2025, all working parents of children aged 9 months to school reception age can access 30 hours free childcare per week.

This staggered approach gives childcare providers time to prepare for the changes, ensuring there are enough providers ready to meet demand.

National Funding Formula Guidance

The LA currently retains 5% of the early year’s entitlements for three- and four-year-olds. The retained funding supports the following:

  • Quality improvement support for individual settings
  • Subsidised Early Years Training Programme
  • Support to families in accessing early years and childcare provision and the early years entitlements.
  • Administration of the early years entitlements
  • Supporting access to early years and childcare provision for children with emerging and complex needs

The DfE has extended the ability for LAs to centrally retain funds for all early years entitlements (previously three- and four-year-old entitlements only), including two-year-old disadvantaged and working parent entitlements and the under 2’s entitlements.

The maximum central retention is set by the DfE at 5% in 2024/25, with the intention to reduce to 3% across all entitlements once the new entitlements are embedded.

The LA will be proposing to Schools Forum to continue retaining up to 5% of the hourly funding rate allocated for the three- and four-year-old entitlements, two-year-old disadvantaged and working parent entitlements and under 2’s entitlements to support the increasing resource required in 2024-25.

The proportion of funding retained centrally (up to the maximum 5%) is decided by the Council and Schools Forum.

Oxfordshire recognises the current difficult climate that many of our early years providers have faced. We recognise the importance of continuing to offer a realistic funding rate and of continuing with high levels of inclusion support at a time that has been most testing for our provisions. We aim to ensure a fair and equitable offer, which meets the needs of Oxfordshire children.

Contingency Fund

LAs can set aside contingency funding as part of their local budgetary process to help manage fluctuations in take-up. Any underspend from an LA’s early years budget must remain within the education budget.

With the new entitlements being introduced in 2024/25 and increased in 2025/26, the LA proposes an allocation from each of the entitlements to the Contingency Fund to continue to support the processing of the new entitlements and the take up of early years entitlements mid-term.

Timescales

Final EYNFF allocations were announced by Government in late November 2023 and can be found here. The allocations, proposed provider rates and the outcome of this consultation, will be reported to Oxfordshire’s Schools Forum on 07 February 2024: https://www.oxfordshire.gov.uk/residents/schools/our-work-schools/oxfordshire-schools-forum

There then follows political ratification and final rates will be communicated to providers as soon as possible after that with indicative budgets no later than 31 March 2024.

The timetable is challenging for all involved. The consultation will close on 21 January 2024 at 9am. We encourage providers to engage in this consultation and thank you in advance for your contributions.

Proposed arrangements for funding received from the Government for the EYNFF in Oxfordshire are:

3-and-4-year-old Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £5.80 per hour, however this is prior to any allocation to central retention; allowable supplements, and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for three- and four-year-olds at this time as it will be dependent on the outcome of the Schools Forum decision on central retention, and the outcome of the proposals in this consultation.

Early Years Pupil Premium (EYPP) – The national rate per eligible child (up to a maximum 570 hours per year), will increase from 62p to 68p per hour in 2024-25. With the introduction of the expanded two-year-old and under 2’s entitlements, these children shall also receive EYPP Funding.

Mandatory deprivation supplement – This continues to be mandatory in 2024-25 and the Local Authority will maintain the rate at 47p per child per hour.

Disability Access Fund (DAF) - The national rate for DAF is increasing in 2024-25 from £828 per eligible child per year to £910. The funding is for 3-and-4-year-olds who are not in Reception classes that are claiming the Disability Living Allowance (DLA). With the introduction of the expanded two-year-old and under 2’s entitlements, these children shall also receive DAF Funding.

Supplementary funding for Maintained Nursery Schools (MNS) – This was originally introduced to protect 2016 to 2017 funding rates, prior to the introduction of the EYNFF, for universal hours only. The supplementary funding hourly rate for maintained nursery schools will increase from £3.80 to £4.64 per universal hour in FY 2024-25 (including Teachers pay and pension uplift), reflecting increased Government funding.

Discretionary Supplements that are not currently used in Oxfordshire are:

  • Flexibility
  • Rurality/Sparsity

Teachers’ Pay and Pensions element - Schools previously received Teachers Pay Grant and Teacher’s Pension Employer Contribution Grant to help meet increased costs arising from the Teachers’ pay awards and higher employers pension contributions from 2018. The last year of these grants being paid separately was FY 2022-23 and the government now pass this funding on through the EYNFF.

To continue to address teachers’ pay and pension funding, following consultation, Oxfordshire implemented the use of a discretionary Quality Supplement in 2023-24 as a mechanism to pass on funding.

We propose to continue to use the Quality Supplement for Teachers’ Pay and Pensions element in 2024-2025.

Two-year-old Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be the same for both the disadvantaged and working parent entitlements.

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £8.15 per hour, however this is prior to any allocation to central retention, allowable supplements and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for two-year-olds at this time as it will be dependent on the outcome of the Schools’ Forum decision on central retention, and the outcome of the proposals in this consultation.

The DfE have confirmed that LAs can choose to allocate the funding for both disadvantaged and working parent entitlements with a single local two-year-old formula, or to have separate local formulae for the two different entitlements.

The LA proposes to have a single local formula for both two-year-old entitlements, the disadvantaged, and the working parent entitlements. We expect that a high proportion of children eligible under the disadvantaged criteria will benefit from increased funding under the required introduction of EYPP and proposed Deprivation supplement (as set out below)

The optional supplements for the two year old formula are :

  • Deprivation
  • Flexibility
  • Rurality/Sparsity
  • Quality

The DfE expect funding for deprivation to be reflected in LAs approach to funding for the two-year-old and under 2’s entitlements. Therefore, the LA proposes to include Deprivation as a supplement within the two-year-old formula.

Under 2’s Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £11.06 per hour per hour, however this is prior to any allocation to central retention, allowable supplements and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for two-year-olds at this time as it will be dependent on the outcome of the Schools’ Forum decision on central retention, and the outcome of the proposals in this consultation.

The optional supplements for the local two-year-old formula are:

  • Deprivation
  • Flexibility
  • Rurality/Sparsity
  • Quality

The DfE expect funding for deprivation to be reflected in LAs approach to funding for the two-year-old and under 2’s entitlements. Therefore, the LA proposes to include Deprivation as a supplement within the under 2’s formula.

Meeting the needs of children with emerging Special Educational Needs

LAs have been required to have a SEN Inclusion Fund to support children who are taking up the three- and four-year-old entitlements, targeted at children with lower level and emerging SEN. In Oxfordshire, the current rate is £38.50 per week and paid to schools and settings indicating the number of children using the description ‘SEN support’ on their headcount return. There is no SEN Inclusion Fund allocation for existing two-year-old entitlements.

The current allocation to the SEN Inclusion Fund is insufficient to meet the needs of the current three- and four-year-old entitlement cohort. The LA proposes to hold a contingency budget to support the SENIF funds due to the growth in need in 3-and 4-Year-old early years provision.

DfE have extended the requirement to establish a SEN Inclusion budget to fund the entitlements for all two-year-olds and under 2’s.

The LA proposes that the SEN Inclusion Fund rate for two-year-olds is set at £38.50 per week

The LA proposes that the SEN Inclusion Fund rate for under 2s is set at £38.50 per week


Have your say

We’d like to hear what you think about our Early Years National Funding Formula (EYNFF) – 2024-25.

Please fill in our online survey by clicking the ‘TAKE SURVEY’ button below.

Purpose

This consultation asks providers for their views on the following areas:

  • The funding principles for 3- and 4-year-olds under the Early Years National Funding Formula (EYNFF)
  • The funding principles for Two-year-olds and Under 2’s under the Early Years National Funding Formula (EYNFF)
  • The Special Educational Needs (SEN) Inclusion Fund and Deprivation funding proposed adjustments

Background and overview:

The Early Years National Funding Formula (EYNFF) for 3-and-4-year-olds was introduced in April 2017. Each year the Government publishes guidance setting out the overall framework, funding rates and expectations on local authorities in implementing the EYNFF.

Local authorities are required to allocate 95% of funding to providers since 2018/19

Local authorities are required to consult providers on annual changes to their local formula.

National rates advised by central government have increased for 2024-25. This includes increases for existing entitlements and newly introduced funding entitlements starting in April 2024.

All children in England and Wales are entitled to 15 hours of free nursery education per week, 38 weeks a year from the term after their third birthday until they reach statutory school age. Parents may choose to take this up in a maintained school, nursery or in a private, voluntary, or independent sector (PVI) early year setting or with a childminder.

Currently the Early Years Block within the Dedicated Schools Grant (DSG) funds the universal and extended provision for all 3- and 4-year-old children and the Early Years provision for disadvantaged 2-year-old children. Funding is also currently used to support the costs for children with emerging levels of Special Educational Needs.

The government extended the free entitlement to nursery childcare from 15 to 30 hours a week for working parents in September 2017. The aim was to reduce the cost of childcare for working families and break down the barriers to work, so that parents who want to return to work or work more hours can do so.

During the Spring 2023 budget announcements, the Chancellor set out large scale childcare reforms to increase availability, reduce costs and increase the number of parents using childcare. The budget announced a range of measures to support education and help parents with childcare using a phased implementation including:

Changes to entitlements, allowing eligible working parents to access 30 hours of free childcare from a younger age.

From April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare.

From September 2024, 15 hours of free childcare will be extended to all children from the age of nine months.

From September 2025, all working parents of children aged 9 months to school reception age can access 30 hours free childcare per week.

This staggered approach gives childcare providers time to prepare for the changes, ensuring there are enough providers ready to meet demand.

National Funding Formula Guidance

The LA currently retains 5% of the early year’s entitlements for three- and four-year-olds. The retained funding supports the following:

  • Quality improvement support for individual settings
  • Subsidised Early Years Training Programme
  • Support to families in accessing early years and childcare provision and the early years entitlements.
  • Administration of the early years entitlements
  • Supporting access to early years and childcare provision for children with emerging and complex needs

The DfE has extended the ability for LAs to centrally retain funds for all early years entitlements (previously three- and four-year-old entitlements only), including two-year-old disadvantaged and working parent entitlements and the under 2’s entitlements.

The maximum central retention is set by the DfE at 5% in 2024/25, with the intention to reduce to 3% across all entitlements once the new entitlements are embedded.

The LA will be proposing to Schools Forum to continue retaining up to 5% of the hourly funding rate allocated for the three- and four-year-old entitlements, two-year-old disadvantaged and working parent entitlements and under 2’s entitlements to support the increasing resource required in 2024-25.

The proportion of funding retained centrally (up to the maximum 5%) is decided by the Council and Schools Forum.

Oxfordshire recognises the current difficult climate that many of our early years providers have faced. We recognise the importance of continuing to offer a realistic funding rate and of continuing with high levels of inclusion support at a time that has been most testing for our provisions. We aim to ensure a fair and equitable offer, which meets the needs of Oxfordshire children.

Contingency Fund

LAs can set aside contingency funding as part of their local budgetary process to help manage fluctuations in take-up. Any underspend from an LA’s early years budget must remain within the education budget.

With the new entitlements being introduced in 2024/25 and increased in 2025/26, the LA proposes an allocation from each of the entitlements to the Contingency Fund to continue to support the processing of the new entitlements and the take up of early years entitlements mid-term.

Timescales

Final EYNFF allocations were announced by Government in late November 2023 and can be found here. The allocations, proposed provider rates and the outcome of this consultation, will be reported to Oxfordshire’s Schools Forum on 07 February 2024: https://www.oxfordshire.gov.uk/residents/schools/our-work-schools/oxfordshire-schools-forum

There then follows political ratification and final rates will be communicated to providers as soon as possible after that with indicative budgets no later than 31 March 2024.

The timetable is challenging for all involved. The consultation will close on 21 January 2024 at 9am. We encourage providers to engage in this consultation and thank you in advance for your contributions.

Proposed arrangements for funding received from the Government for the EYNFF in Oxfordshire are:

3-and-4-year-old Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £5.80 per hour, however this is prior to any allocation to central retention; allowable supplements, and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for three- and four-year-olds at this time as it will be dependent on the outcome of the Schools Forum decision on central retention, and the outcome of the proposals in this consultation.

Early Years Pupil Premium (EYPP) – The national rate per eligible child (up to a maximum 570 hours per year), will increase from 62p to 68p per hour in 2024-25. With the introduction of the expanded two-year-old and under 2’s entitlements, these children shall also receive EYPP Funding.

Mandatory deprivation supplement – This continues to be mandatory in 2024-25 and the Local Authority will maintain the rate at 47p per child per hour.

Disability Access Fund (DAF) - The national rate for DAF is increasing in 2024-25 from £828 per eligible child per year to £910. The funding is for 3-and-4-year-olds who are not in Reception classes that are claiming the Disability Living Allowance (DLA). With the introduction of the expanded two-year-old and under 2’s entitlements, these children shall also receive DAF Funding.

Supplementary funding for Maintained Nursery Schools (MNS) – This was originally introduced to protect 2016 to 2017 funding rates, prior to the introduction of the EYNFF, for universal hours only. The supplementary funding hourly rate for maintained nursery schools will increase from £3.80 to £4.64 per universal hour in FY 2024-25 (including Teachers pay and pension uplift), reflecting increased Government funding.

Discretionary Supplements that are not currently used in Oxfordshire are:

  • Flexibility
  • Rurality/Sparsity

Teachers’ Pay and Pensions element - Schools previously received Teachers Pay Grant and Teacher’s Pension Employer Contribution Grant to help meet increased costs arising from the Teachers’ pay awards and higher employers pension contributions from 2018. The last year of these grants being paid separately was FY 2022-23 and the government now pass this funding on through the EYNFF.

To continue to address teachers’ pay and pension funding, following consultation, Oxfordshire implemented the use of a discretionary Quality Supplement in 2023-24 as a mechanism to pass on funding.

We propose to continue to use the Quality Supplement for Teachers’ Pay and Pensions element in 2024-2025.

Two-year-old Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be the same for both the disadvantaged and working parent entitlements.

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £8.15 per hour, however this is prior to any allocation to central retention, allowable supplements and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for two-year-olds at this time as it will be dependent on the outcome of the Schools’ Forum decision on central retention, and the outcome of the proposals in this consultation.

The DfE have confirmed that LAs can choose to allocate the funding for both disadvantaged and working parent entitlements with a single local two-year-old formula, or to have separate local formulae for the two different entitlements.

The LA proposes to have a single local formula for both two-year-old entitlements, the disadvantaged, and the working parent entitlements. We expect that a high proportion of children eligible under the disadvantaged criteria will benefit from increased funding under the required introduction of EYPP and proposed Deprivation supplement (as set out below)

The optional supplements for the two year old formula are :

  • Deprivation
  • Flexibility
  • Rurality/Sparsity
  • Quality

The DfE expect funding for deprivation to be reflected in LAs approach to funding for the two-year-old and under 2’s entitlements. Therefore, the LA proposes to include Deprivation as a supplement within the two-year-old formula.

Under 2’s Entitlement

The EYNFF funding rate from the Government to Oxfordshire in 2024-25 will be £11.06 per hour per hour, however this is prior to any allocation to central retention, allowable supplements and/or contingency fund.

We are therefore unable to confirm the providers hourly rate for two-year-olds at this time as it will be dependent on the outcome of the Schools’ Forum decision on central retention, and the outcome of the proposals in this consultation.

The optional supplements for the local two-year-old formula are:

  • Deprivation
  • Flexibility
  • Rurality/Sparsity
  • Quality

The DfE expect funding for deprivation to be reflected in LAs approach to funding for the two-year-old and under 2’s entitlements. Therefore, the LA proposes to include Deprivation as a supplement within the under 2’s formula.

Meeting the needs of children with emerging Special Educational Needs

LAs have been required to have a SEN Inclusion Fund to support children who are taking up the three- and four-year-old entitlements, targeted at children with lower level and emerging SEN. In Oxfordshire, the current rate is £38.50 per week and paid to schools and settings indicating the number of children using the description ‘SEN support’ on their headcount return. There is no SEN Inclusion Fund allocation for existing two-year-old entitlements.

The current allocation to the SEN Inclusion Fund is insufficient to meet the needs of the current three- and four-year-old entitlement cohort. The LA proposes to hold a contingency budget to support the SENIF funds due to the growth in need in 3-and 4-Year-old early years provision.

DfE have extended the requirement to establish a SEN Inclusion budget to fund the entitlements for all two-year-olds and under 2’s.

The LA proposes that the SEN Inclusion Fund rate for two-year-olds is set at £38.50 per week

The LA proposes that the SEN Inclusion Fund rate for under 2s is set at £38.50 per week


Have your say

We’d like to hear what you think about our Early Years National Funding Formula (EYNFF) – 2024-25.

Please fill in our online survey by clicking the ‘TAKE SURVEY’ button below.

  • Early Years National Funding Formula (EYNFF) – 2024-25 - consultation

    Consultation has concluded
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