Purpose

Local Authorities are
required to consult with early years providers and Schools Forum
with any proposed changes to their Early Years Funding Formula.
Under very tight DfE timelines, a consultation took place between
19 December 2025 and 25 January 2026. Taking into account the
outcomes of the consultation proposals, the decisions were
supported by Schools Forum on 6 February 2026 and approved by
Cabinet on the 10th February 2026.  This will be implemented
from 1 April 2026.

Content

1.   
Increase the amount retained centrally by
£81,184 this includes £42,884 to reflect the
anticipated impact of the local authority pay award (3.5%) for each
of the local authority support teams and £43,300 to increase
resources in the Free Early Education Funding Team to support
changes in the early years funding system and associated local
authority duties. (Note: During the provider consultation events
there was discussion about the admissions element of the
miscellaneous central retention. As a result, in the final
proposals the Early Years Block contribution to the Pupil Admission
function has been removed, making £5,175 extra per year
available to distribute to providers.
2.   
Retain a contingency fund of 1% from each funding
stream. The contingency fund is set aside to reduce risk of an
overspend and will be paid to providers in the final term of the
financial year if sufficient funds are available.
3.   
From April 2026, change the number of funded weeks
that are used to calculate funding for providers in the summer and
spring terms to align with the number of funded weeks the
Department for Education (DfE) use to calculate the early years
block funding for local authorities.
4.   
Transfer £500,000 from the Early Years Block
to the High Needs Block in 2026-27 to support financial
sustainability as per the Safety Valve Agreement with the
Department for Education.
5.   
SENDIF budget to remain at £3 million, (plus
£105,000 for inflation), which includes a £2 million
contribution from the Early Years Block and £1 million
contribution from the High Needs Block.