Purpose

The Council approved Lincolnshire’s
early years funding formula for 2024/25 financial year (I030817)
following the Government’s childcare reforms in expanding the
childcare offer.

It is the Council’s responsibility to establish a local early
year’s entitlement funding formula. The funding formula is
reviewed annually following the Government’s updated guidance
and funding levels.

Lincolnshire’s local early year’s entitlement funding
formula principles and approach remain in place for 2025/26. The
increased Government funding through Lincolnshire’s Early
Years block allocation has enabled the hourly rates of childcare to
be increased for 2025/26.

The Council is compliant with the regulations relating to a
mandatory deprivation factor for 3- and -4-year-old pupils; an SEN
inclusion fund; pass-through funding of 97% to providers and the
value of all supplements below the 12% threshold.

Each early year’s funding stream has been established in
accordance with the indicative budget. The Council has sought to
maximise the funding distributed to providers recognising the cost
increases facing the sector. It should be noted that the final
allocation is based on actual participation levels, therefore
consideration of risk has been considered within the budgeting
arrangements

The Council shared the proposals at Lincolnshire’s
Schools’ Forum in January 2025. The Schools’ Forum
approved the Council’s proposals relating to the allocations
and distribution of the centrally retained budgets within the Early
Years block.

Finance Commentary

Government funding is received through the Early Years block to
fund early years entitlement, and the use of funding is subject to
the Schools and Early Years Finance Regulations 2025. The early
years entitlement funding formula arrangements were agreed in
2024/25 following the Government’s childcare reforms.
Lincolnshire’s local early year’s entitlement funding
formula principles and approach have remained in place for many
years and will continue to operate in 2025/26. These are in
accordance with the regulations.
The increased Government funding through Lincolnshire’s Early
Years block allocation has enabled the hourly rates of childcare to
be increased for 2025/26 and each early year’s funding stream
has been established in accordance with the indicative
budget.

Decision

To approve the 2025/26 early years entitlement
funding formula arrangement updates and universal hourly
rates:
• 3- and -4-year-old entitlement hourly rate:
£5.21p
• 2-year-old entitlement hourly rate: £7.41p (and
£0.19p disadvantaged criteria)
• Under 2’s entitlement hourly rate: £10.18p
• Nursery School supplementary factor hourly rate:
£3.74