Decision details

Early Years Provider Funding Rates 2024/25

Decision Maker: Corporate Director Children and Young People's Services

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes


To consider the results of the funding consultation undertaken with early years providers operating within North Yorkshire and to approve recommendations to change the funding rates paid to early years’ providers for the funded entitlements for 3


i. To agree the following recommendations for the 2024/25 financial year:
• The base provider funding rate for 3- & 4-year-olds (both universal and working family entitlement) is £5.13 per hour
• The base provider funding rate for 2-year-olds (both disadvantaged and working family entitlement) is £7.01 per hour
• The based provider funding rate for under 2-year-olds (working family entitlement) is £9.55 per hour
• The current deprivation funding methodology used for 3 & 4-year-olds is extended to all early years’ funded entitlements
• The funding for the SENIF is provided from the Early Years Block DSG
• A 3% funding retention rate for the provision of local authority centrally managed services for early years is applied for all funded entitlements
ii. To agree that, for the 2023/24 financial year, the early years element of the DfE Teachers Pay grant is passed on to all providers based on the DfE distribution methodology of 3p per hour on the universal and extended hours for 3 & 4-years-olds for the Autumn 2023 and Spring 2024 terms.
iii. To note the 2024/25 funding rates for the other early years funding elements

Reasons for the decision:

In the 2023 Spring Budget, the Government announced the expansion of free early education and childcare entitlements for working parents and additional investment to support the expansion programme from 2024/25. Free education and childcare entitlement for working parents will be expanded as follows:

• From April 2024, working parents of 2-year-olds will be able to access 15 hours of free childcare per week (38 weeks a year).
• From September 2024 this will be extended to parents of 9 month to 3-year-olds.
• From September 2025 working parents of 9 month to 3-year-olds will be able to access 30 free hours per week (38 weeks a year).

The regulations accompanying the Early Years National Funding Formula require local authorities to pass through at least 95% of the funding for each of the funded early years entitlements individually. The 95% includes the following for each of the entitlements separately:

• base rate funding for all providers
• supplements for all providers
• lump sum funding for Maintained Nursery Schools (MNS) (only applicable to 3 and 4-year-olds, and excluding any funding from DfE’s MNS supplementary allocation)
• the funding paid directly to providers from the special educational needs Inclusion fund (SENIF)
• contingency funding

The maximum level of funding allowed to be retained by the local authority for the delivery of centrally managed services associated with early years’ provision is 5% for each of the funded early years entitlements.

A funding consultation has been undertaken with early years providers within North Yorkshire on the following elements of the early years funding entitlements for the 2024/25 financial year:

• The provider base funding rates for 3 & 4-year-old universal and working parent entitlements, the 2-year-old entitlements for disadvantaged children and working parents, the under 2-year-old entitlement for working parents.
• The operation of a deprivation funding supplement for all funded entitlements
• The use of the Early Years Dedicated Schools Grant (DSG) to fund the provision of the Early Years SENIF.

Alternative options considered:


Publication date: 29/02/2024

Date of decision: 29/02/2024

Effective from: 09/02/2024

Accompanying Documents: