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The formula determines how much funding each local authority receives from the Department for Education (DfE) in respect of the free childcare of up to 30 hours for 3 and 4 year olds. It is for local authorities to determine the actual funding rates that providers receive, although under the new formula there is a minimum pass-through rate and certain supplements may also be added.

Supplementary funding is being provided to Maintained Nursery Schools until 2019-20 to allow them to maintain their 2016-17 funding levels. A consultation will be held on the future funding of such settings.

Section 8 sets out the Government’s rationale for changing the early years funding formula.

This note also provides information about the other funding available for children with special educational needs or who receive Disability Living Allowance (DLA), and the Early Years Pupil Premium for disadvantaged children.

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