Early Years Funding: Millions Used for Other Purposes or Taken Back by DfE

Local authorities are continuing to use £millions of early years funding to offset other deficits or put in reserves, according to an investigation
by National Day Nurseries Association (NDNA).

The NDNA also discovered that almost £60m of early entitlement funding was “clawed back” by the Department for Education (DfE) from childcare places for 2021/22. A Freedom of Information (FOI) request to all local education authorities (LEAs) in England asked whether they had overspent or underspent their early years funding allocation for places in 2021/22.

In total, NDNA found that £46m of early entitlement funding was unspent by 92 councils, with 37% using this money (£15m) to offset deficits within their Designated Schools Grant. Almost half of these used £5m to set against their High Needs Block losses.

A third of LEAs put their unspent funding (£15m) in their reserves. Only 11 councils gave any of this money back to providers in the form of a funding rate boost or one-off grant. A further 16 had not decided or did not tell us how they would spend £7.6m.

A total of 43 LEAs (37% of those who have responded every year) have ended up with a surplus four years in a row. Only six of these gave any of this money back to nurseries. Fifteen local authorities underspent by £1m or more; Islington has consistently reported an underspend of more than £1 m for the last four years. A further four councils had a million plus underspend in three of the last four years.

To read the full report please click here (Source: NDNA News)


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