Consultation on early years funding in England focuses on SEND and disadvantage

The Department for Education (DfE) have today launched a consultation on proposed changes to the early years funding system. It runs until 14 September 2026. The proposal sets out changes to take place over a three year period:

In 2027-28 it would:

• Use updated data to calculate how local authorities’ (LAs’) funding allocation is adjusted to reflect disadvantage, including using IDACI as well as free school meal (FSM) data for 3- and 4-year-olds
• Introduce a recommended minimum spend on Special Educational Needs and Inclusion Funds (SENIF) of 0.75% of their Early Years Block
• Allow LAs to redistribute unused contingency funding to providers in-year instead
• Require LAs to pass on more of their EL2 funding rate to providers to support disadvantaged children and their families.

In 2028-29 it would:

• Focus deprivation supplement more clearly to improve access for disadvantaged children and families
• Reduce the number of permissible local funding supplements
• Build upfront inclusion funding into the rates paid to local authorities, replacing the stand-alone Inclusive Early Years Fund
• Replace SENIF and Disability Access Fund (DAF) with a streamlined targeted funding stream

In 2029-30 it would:

• Begin rebalancing high needs funding so that a greater share is available to early years settings upfront
• Begin to separate funding for local authority central services from entitlements funding allocated to providers

While the proposals include a number of potentially sensible measures including addressing issues of inconsistency between LAs and reducing the bureaucracy around SEND funding, there are also many gaps. We are disappointed that the consultation does not address increasing the overall level of entitlement funding to address the issues of under-funding, particular for 3- and 4-year-olds. The proposed removal of the quality supplement does not help measures to raise qualification levels in the workforce or recruit and retain well qualified staff, which potentially leaves a gap unless the Early Years Teacher Recognition Payment is rolled out to all settings and schools in all areas.

The consultation also fails to address the need to replace maintained nursery school supplementary funding with a consistent national approach to meeting their specific funding needs – although the interconnected nature of the funding formula means that this does need to be done alongside other changes.

While we welcome the suggestion that early years providers should work more closely with Best Start Family Hubs, there is no recognition that this requires additional funding for the training and staff time involved. Many schools and settings already do this work, but the reality is that it is unfunded and further adds to the pressure on staff, particularly in the most disadvantaged areas where levels of unmet need are highest.

We will consult with members over our response, and also encourage our members to respond individually.