Councils given flexibility with free childcare funding

Councils will be able to move around government funding for free childcare entitlements in exceptional circumstances, to make sure sufficient childcare places are available for vulnerable children and those of critical workers.

The Government has confirmed that councils will temporarily be able to use the funding they receive for the free entitlements for two, three and four-year-olds differently, redistributing it where absolutely necessary for the benefit of critical workers and the parents of the most vulnerable children, when their usual arrangements are no longer possible as a result of Coronavirus.

This builds on existing commitments to continue paying free entitlement funding – worth £3.6 billion a year – to local authorities throughout the Coronavirus outbreak. Childcare businesses will also benefit from other support schemes, including a business rates holiday, the Small Business grant for those that don’t pay business rates, the Self-Employment Scheme and the Coronavirus Job Retention Scheme (CJRS).

On Friday (17 April) the Department for Education published guidance to set out how the CJRS and free entitlement funding interact, confirming that early years providers can access the CJRS to cover the proportion of their income considered to have been paid from private income, such as parent fees. Any setting which sees their early entitlement funding reduced in order to fund childcare places elsewhere will be able to increase the proportion of their salary bill eligible for the CJRS.

Press release in full

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