How does 3 and 4 year old funding work?

Childcare providers across the UK have been left in an unsustainable position as recent rates for 3 and 4 year old funding were announced just days before the new financial year in April 2016. In the majority of cases the rates announced, which already did not cover the cost of funded places, have not been increased and in some cases have even decreased, leaving nurseries struggling to adequately fund the quality childcare for the children in their care.

The Government sets out the expectations for local authorities to provide childcare services around certain criteria such as age and wealth.

At the moment there is some provision for all 3 and 4 year olds in the UK to have “free nursery places”.  First, a child becomes eligible from the term that begins after they turn 3. This means that some children will receive the funding for one year or 3 terms and others for 5 terms, depending on where their birthday falls within the year.

Each local authority calculates what it costs to provide this “free” care and the funding that nurseries receive is based on the calculations for schools. They then make upward adjustments to reflect additional private sector costs, such as rent and insurance, which schools don’t pay.

As schools are only open 38 weeks of the year, the 15 hours free becomes 15 hours x 38 weeks, or 570 hours per annum. Each private nursery then has a set number of opening weeks; at Tops Day Nurseries, the majority of our settings are open 52 weeks a year.   So 570 divided by 52 means we are actually funded for just under 11 hours per week rather than 15.

If your child turns 3 after the 1st September, the calculation is slightly different. As the term lengths are different, the allocation adjusts – with 210 hours being allocated to Autumn term, 180 to the Spring term and the remaining 180 to Summer term.

At Tops Day Nurseries, we welcome funded children and encourage parents to make use of the funded hours offered to them. However, the entitlement that is “free” for parents costs the nurseries more than our hourly rates to meet the legal requirements of ratios, wages, developmental activities and resources.

You may have recently seen us in the press and on social media raising awareness of the funding cuts.  We need your help to have our voice heard; join us at Tops Day Nurseries in our petition to ask the Government to pass more funding to the local authorities, who can in turn increase the amount of funding nurseries receive for their funded positions. Nurseries are closing because of the underfunding of the “free” nursery hours; we can’t allow this to happen and have the future of our children placed at risk.

To find out more about Tops Day Nurseries, please click here.

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