Early years funding updates

To try and co-ordinate important messages we are including funding updates on this webpage. This will include everything that is current. We recommend that you ‘bookmark’ or save this webpage as a ‘favourite’ so you can easily refer to it.

  • Statutory Guidance - April 2026

    On Monday 9th February 2026 the Department for Education released the Statutory Guidance Early education and childcare (valid from April 2026).

    Local authorities have a legal duty to ensure that early years funded providers meet the requirements of the statutory guidance and that parents access the entitlements in the spirit that they are intended.

    We are working through the document and will be making the necessary changes to our Provider Agreement in due course and this will include the changes regarding the Ofsted inspection outcomes. 

    There is more detail in the Charging Section from A1.31 and we now have a Transparency Section A1.39 which supports the requirements for January 2026 as detailed in 2025.

    We know providers have been making changes to their funding models, reviewing their private hourly fees, updating charging policies for Chargeable Extra’s, and moving to itemised invoices to ensure they are compliant for January 2026.

    Providers must have a clear offer of where funded time can be accessed, what Chargeable Extras are provided and what options there are for parents that are unable or unwilling to pay.

    We know that this has presented some challenges for some providers but thank you for your co-operation.

  • Parent Queries and Complaints

    Over the past 12 months, we have seen a considerable increase in parent queries and complaints relating to the funding offer and chargeable extras.  Some of these queries were simply where information provided was not clear and transparent.  We have worked closely with a number of providers in Devon and reviewed funding models, charging policies and parent communications to ensure providers are meeting the requirements of the Statutory Guidance.  We have seen some positive changes to the funding offers that enables parents to access more funded hours which is making a real difference to families in Devon.  Websites and policies have been updated so that parents understand what is available.

    However, having options for parents who do not want to access Chargeable Extras has been more challenging for providers, especially when it comes to food and activities.

    It was felt that some of the options that were being offered by some providers were not reasonable and designed to make it difficult for parents to opt-out. They reported feeling pressurised into accessing and paying the charges which the DfE state must be voluntary.

    We have explored various options with numerous providers and after discussions with Devon colleagues, senior managers, and other LA’s, we feel it is important for us to expand and clarify charges in our Provider Agreement as per A1.35:

    Providers should be mindful of the impact of charges on families, particularly the most disadvantaged. Providers who choose to offer the free entitlements are responsible for setting a policy on providing parents with options for alternatives to additional charges. This policy must offer reasonable alternatives that allow parents to access the entitlement for free, including allowing parents to supply their own, or waiving the cost of these items.

    Therefore, providers in Devon have two options for parents that want to opt out of food.

    You can either:

    • Allow parents to bring in a packed lunch or
    • Provide children with your food offer free of charge

    Packed lunches

    You can set a packed lunch policy with foods you’d expect to be provided for the time a child is with you.  List foods that should be included for each meal/snack and what is not allowed due to allergies. You may want to reheat homecooked meals, you may not. You may ask parent to include an ice pack if you don’t have refrigerator space. Your packed lunch policy must be reasonable. This option comes with no cost to the setting but does require more considerations with allergies, storage and content.

    Waive fees

    Our funding formula includes a universal deprivation supplement on every funded hour. This funding can be used to offer a free lunch.  This may appear to be a suitable option if your parent requests have been low but do consider if this is financially manageable if more parents start to opt out. This option does enable the setting to continue operating lunches in the normal way but does need to be costed. You could do this as a temporary measure if requests are low and rethink the packed lunch options if requests increase.

    We can confirm that it is not considered reasonable or acceptable to request:

    • Cooked meals only to be reheated
    • Hot food to be provided and remain hot in a flask for mealtimes
    • Foods or meals that match the settings menu or meal plan
    • Shop bought items in original packaging
    • Ingredients or shopping lists of food items that parents must supply
    • Parents to drop off meals at a different time to when the child arrives at the setting.

    As part of our work with providers, some are reporting that they are waiving fees for children who are in receipt of the targeted 2-year-old funding (FRAS) or Early Years Pupil Premium. Some of these families may have returned to work after qualifying for these funding streams and do not lose eligibility. Other children could be in foster care where foster parents are paid an allowance that includes food or a child that has been adopted and their parents are not financially disadvantaged and could afford to pay for Chargeable Extras. Working parents who may qualify for the working entitlements are often not considered disadvantaged but could be more in need. We recommend that providers who have such a policy, urgently review the removal of additional charges to just these targeted families and consider all children and families that are in the setting.

    Other feedback in relation to packed lunches are concerns relating to allergies, but this is not a reason to not allow packed lunches.  There are early years settings that have a mixture of packed lunches and cooked lunches, and next week we hope to share how they manage allergies at mealtimes that will hopefully support settings with their lunch plans. If you are a provider allowing packed lunches whilst managing allergies in your setting, and you’d like to share your practices, that would be appreciated.

  • Reminders of other requirements of the Statutory Guidance

    For consistency, the DfE have the Chargeable Extras template. You cannot have a single daily charge and must set your fees under the following three headings:

    • Food: – meals, snacks, drinks
    • Consumables: – nappies, wipes, sun cream etc
    • Activities: – yoga, French, outings or events

    These charges are voluntary and cannot be a condition of a child being offered a funded space.

    You do not have to cost each individual meal/snack within your food charge, but you may have different charges for different ages, or if children are coming for different funded session times (depending on your model).  For example, a child doing an afternoon session would only access tea and not breakfast or lunch. The food charge would reflect what is provided within that session.

    Parents must be able to purchase the Chargeable Extras they require, and this should be done as a termly arrangement. They can choose to access the food offer but not the Consumables or Activities.  There cannot be a requirement that parent’s access all or nothing.

    If parents opt out of any Activities charge, the child must be offered an appropriate alternative EYFS activity. You must consider how you manage this within a room or across the setting depending on the number of children in each age range and the number of families that opt out.

    Over the last 18 months there have been numerous Ombudsman reports and court cases where parents are not being offered their funded entitlements as intended and the LA has a duty to ensure Government Funding is allocated to providers that are compliant and meeting the requirements of the Statutory Guidance. The outcomes of investigations have resulted in LA’s being required to repay parent fees that have been charged, and LA’s recovering those payments from providers.

    We don’t want Devon providers to be in this position and want to support you to make any necessary changes to be compliant.

    Requirements for January 2026

    As per the Statutory Guidance of 2025, providers were advised of new requirements that needed to be implemented by January 2026.

    Itemised invoicing

    Providers must have itemised invoices that allow parents to see that they have received their child’s entitlement hours completely free of charge and understand that any fees paid are for additional hours or optional chargeable extras.  Invoices and receipts should include the provider’s full details so that they can be identified as coming from a specific provider.

    Providers must break down their charges and fees separately into:

    • the free entitlement hours
    • additional private paid hours
    • food charges
    • non-food consumables charges
    • activities charges

    If due to software suppliers this is delayed, it is acceptable for this level of detail to be included in the parent contract that confirms the total weekly charge and how that is calculated for any invoices.

    Transparency

    The costs of chargeable extras must be published on provider websites or, where they do not have a website, on local authority Family Information Services. These should be clear, up-to-date and easily accessible to parents, to enable parents to make an informed choice. They should set out, for each setting, the amounts for all chargeable extras listed, as well as the pattern of hours that parents can take the entitlements.

    The statutory guidance say that local authorities may exempt childminders and providers caring for 10 or fewer children at any one time. However, we treat all providers equally and therefore this is a requirement for all funded settings.

    Online teams meetings

    We want to support providers in Devon and have some online sessions booked to discuss some of the topics in the Statutory Guidance as follows: 

    Chargeable Extras and the options providers must have for parents  

    Finances, funding and fees including itemised invoicing 

    Compliance and meeting the requirements of the Statutory Guidance 

  • Early Years Funding Rates from 1st April 2026

    We are pleased to advise that our proposed funding rates that we shared with you in January have been approved.

    The full increase received from the Department for Education is being passed on to providers in the hourly funding rate for all providers in Devon.

    Early Years Entitlement Funding rates for each age are as follows:

    Early Years Entitlement rates 3–4-year-olds 2-year-olds Under 2’s (from 9 months old)
    Hourly base rate £5.66 £7.62

    10.24

     

    Universal SEND funding

     

    		 £0.10 £0.10 £0.10

    Universal deprivation funding

     

    		 £0.04 £0.04 £0.04

    Total hourly rate

     

    		 £5.80 £7.76 £10.38
    Early Years Pupil Premium £1.15 £1.15 £1.15

    Disability Access Funding (per year)

     

    		 £975 £975 £975

    For further details visit: Early years funding rates proposal 2026-27 – Information for childcare providers

    These changes will be reflected for any hours claimed in Summer 2026 from 1st April – 31st August.

    If any hours for the Summer period have been included in your Spring Headcount, please ensure you reduce the claim in the Amendment so that the hours are funded in the correct funding period and at the correct funding rate.

  • 2-Year-Old funding: Working Entitlements and Families Receiving Additional Support (FRAS)

    There are two different funding streams available for 2-year-olds who meet the eligibility criteria.

    • The working entitlement is up to 30 hours per week. This is for parents that meet the minimum income requirements of 16 hours a week at the National Minimum Wage, or who have a carers role.
    • The targeted 2-year-old funding is up to 15 hours per week. This is for non-working, or low-income households, who are also in receipt of a qualifying benefit, for children who are in care or who have left care subject to an adoption, special guardianship or child arrangement order, for children that are in receipt of Disability Living Allowance (DLA) or children who have an Education, Health Care Plan (EHCP). Targeted 2-year-old funding has previously been referred to as disadvantaged 2-year-old funding or 2gether funding in Devon.

    The DfE have recently updated their terminology and have started to refer to ‘targeted’ 2-year-old funding as ‘Families Requiring Additional Support’ (FRAS) and in the coming months we will be updating our systems and guidance to reflect this change. It is important that you inform your staff and update your parent literature to ensure everyone is familiar with the term ‘FRAS’ funding.

    Applications for FRAS are made on the Devon Citizen’s Portal.

    Parents can find details on how to apply for the working entitlement, and information on other help that is available for childcare costs by visiting Best Start in Life

    To access the working entitlement from 1st January 2026 (spring term 2026) a parent must have applied and received their code by 31st December 2025.

    If a family advises that they are eligible for 2-year-old funding the process remains the same.

    • If they have working entitlement they will have been issued with an 11-digit code that starts ‘50’, ‘11’ (or ‘40’ if a foster carer). You will need to run a check on the code using the parent’s national insurance number via the provider portal to confirm if it is eligible for the relevant funding period.
    • If a family advises that they are entitled to 2-year-old funding (FRAS), and applied via Devon County Council,  they would have been issued with a TYF878 code. They will need to show you written confirmation to confirm eligibility, and this will also show the earliest date that they can take up the funded place. You cannot run a check on this code, or add it to a task, you just need to see the evidence (the code alone is not sufficient). We suggest that you keep a copy on file in case of any query.
    • If a family has been awarded the 2 year old funding by another local authority, we ask that you direct them to the Devon Citizen Portal to make an application. If their circumstances have changed since this was previously awarded, please ask them to request help and attach a copy confirming their eligibility to their Devon application so we can manually assess. If they are still deemed as eligible, they will be issued with an email/portal message which will confirm this.

    FRAS funding for 2-year-olds can be used alongside the working entitlement for a combined maximum of 30 hours a week (1140 hours a year).  Information is provided in our Headcount and Amendment Guidance regarding the process for claiming hours on the headcount and amendment tasks.

    There is no universal entitlement for 2-year-olds so there will be some 2-year-olds that don’t qualify for funding. If one parent is working and the household income is too high to qualify for FRAS, or parent/s are working, and their earnings exceed the £100,000 limit for working entitlements they won’t be eligible.

    Please ensure that you have confirmed a child’s eligibility for the funding before offering a funded space.  Until eligibility is confirmed you should only allocate hours as fully chargeable and ensure that this is reflected in your contracts.

  • Early Years Expansion Grant (EYEG)

    For 2025/26 we have received a grant of £966,227 from the Department for Education (DfE) for the final phase of the roll-out of the working entitlements.  From September 2025, the working entitlements for eligible 2-year-olds and under will increase to up to 30 hours per week.

    Local authorities must distribute the funding in a clear and transparent manner and consider specific growth needs in their area to meet their sufficiency duty.

    Whilst the funding is calculated on uplifting the 2-year-old and under 2’s funding rate, due to provider feedback, we have decided to distribute an increase across all ages (£778K) and retain some funding (£188K) for revenue grants in areas where we know new development will be required in 2025.  Due to more 3- & 4-year-olds accessing a higher number of funded hours, it does reduce the amount of increase we can allow on each of the funding rates.

    The increases in hourly rates from 1st April 2025 (summer funding period) is as follows:

    3- & 4-year-olds = 6p per hour

    2-year-olds = 4p per hour

    Under 2’s  = 4p per hour

    Therefore, the new hourly rates from 1st April 2025 will be:

    3- & 4-year-olds = £5.56

    2-year-olds = £7.46

    Under 2’s = £9.96

    All hourly rates above include 10p for universal SEND and 4p for universal Deprivation.

    The increased hourly rates will be used to calculate the funding due for summer once the summer headcount tasks have been submitted. This will be shown on the financial breakdown report that will be issued via the provider portal once the balancing headcount payment is made at the end of June.  Please note that we will not be amending monthly forecast payments.

    This is a one-year grant so these increases will be removed from the funding rates from April 2026 and the normal DfE increases will be allocated once known.

    If you are looking at a further development for 2-year-olds or under in an area of need, please speak with your EYCA so we can advise on the grant availability.

    Please ensure this communication is shared with the business owners, directors, finance colleagues and anyone else who needs to be aware.

  • Updated Statutory Guidance re: Charges

    Further to our email sent on Friday 28th March, we have made some amendments to our existing provider agreement with regards to charges and notice periods. The changes are as follows:

    Section 4: Charging parents – opening statement added

    Section 4: Charging parents – Notice periods 4.21 amended

    Section 4: Charging parents – Notice period original 4.21 now 4.22

    Section 10: Termination and withdrawal of funding – Ofsted/ISI outcomes 10.6 amended

     Any reference to consumables, service charges or additional charges are now referred to as ‘chargeable extras’.

    We will continue to make amendments/updates to the provider agreement as and when required.

    Following the release of the Statutory Guidance and our briefing sessions, we have some FAQ’s from both the DfE and from our Devon providers which we hope you will find useful.  We can’t cover every different scenario but hope it sets the options available to you if you are thinking about making changes to your model and/or your additional charges.

    DfE Charging – FAQs

    Provider FAQs for Chargeable Extras

    The DfE have advised that they will not be encouraging parents to opt-out of charges and we are not planning on publicising the changes to parents but you must continue to have options available.  Likewise, you do not need to highlight alternative options to parents and can simply say that you have reviewed your charging policies and have made changes to meet the Statutory Guidance requirements and if parents have any queries, to contact you to discuss.  The DFE are requesting that Chargeable Extra’s, are listed as hours, food, consumables and activities.  The DfE have a template that can be used to agree with parents the services they require and the charges.  To support providers we have drafted a template policy that can be used to set-out your offer along with other charges that may apply to funded or non-funded time.

    It is not a requirement that you use these templates but it is a requirement that all settings are open and transparent with your charges.  Your fees and charges should be published on your websites or social media pages.  We are looking at the Provider Self Update to see if the information can be held centrally and will update you further with our progress.

    Template – DfE Chargeable Extras

    Template – Devon Policy for Chargeable Extras

    Chargeable Extras and itemised invoicing need to be fully implemented by January 2026.  LA’s can exempt providers caring for 10 or fewer children but being transparent applies to all settings.  Pupil numbers fluctuate through the year, and we want to be consistent with all sectors. This is therefore a requirement of all funded providers in Devon.

    We know providers are being asked for detailed invoices for parents who are claiming childcare through their Universal Credit claims so if you have your own invoicing systems, you may want to make changes sooner.  If you are using software packages, it will take time for them to be updated.

    If you have an example of an invoice that has been queried by DWP for a Universal Credit claim and parents are happy for you to share their details, please email copy of invoice and any communications so that we can follow this up with our DWP contact.

    If you have any specific topics that you would like us to cover, please let us know and we will do our best to plan an appropriate session.

  • Training sessions, videos & presentations

    Spring Amendment Online Training Sessions:

    We will be running online sessions via Teams on how to complete your spring amendment tasks. The dates and times are shown below:

    Friday 20th March 2026 from 11.00am to 12.00 noon

    Wednesday 25th March 2026 from 6.30pm to 7.30pm

    Statutory Guidance – April 2026:

    We want to support providers in Devon and have planned online sessions to discuss some of the topics in the Statutory Guidance as follows: 

    Chargeable Extras and the options providers must have for parents

    Finances, funding and fees including itemised invoicing

    Compliance and meeting the requirements of the Statutory Guidance

    There is no requirement to book a place on any of the sessions, please just click on the link to join.

    Videos:

    We have also produced some training videos to help with the completion of tasks:

    More videos will be added as they become available.

  • Registered email address for funding purposes

    If you change your email address, and this is also used for funding purposes i.e. provider portal, remittance etc. please email eyef@devon.gov.uk to advise and ask for this to be updated. If we have an incorrect email address you won’t receive conflict, audit emails, you may be missing out on important information regarding funding, and it will cause problems if you need to reset your provider portal password. 

    You may also need to register a new egress account for the new email in order to share sensitive and confidential information with us. Please visit Egress support for more information 

    Please could we also ask that funding information is shared with other staff/colleagues where relevant and appropriate.

  • Polylino EAL Resources

    The Early Years and Childcare service has a number of licences available for Polylino resources. 

    Polylino is a multilingual digital picture book service for early years providers. It provides nursery practitioners and managers with a multilingual digital library aligned with the EYFS  curriculum which can be used to support language and literacy development in the nursery and at home.  

    More information is available on YouTube or by visiting the website.  

    If this is something that would support EAL children in your setting, please sign up for the free trial on the Polylino website and if you would like to apply for licences, please complete the Polylino EAL resources for early years children application form

 


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