Guidance

Early years funding guidance for local authorities: spring term 2021 and the 2021 to 2022 financial year

Published 18 March 2021

This guidance was withdrawn on 28 December 2023

This has been withdrawn as it is out of date.

Find the latest guidance on early years funding on GOV.UK.

Applies to England

This is a technical guidance for local authorities which sets out:

Section 1: how local authorities can access the top-up financial support we have put in place during the 2021 spring term, up to a capped level of 85% of January 2020.

Section 2: how local authorities will be funded for the early years entitlements in the financial year 2021 to 2022.

Section 3: information for local authorities on how to submit the data and key dates.

This follows from the policy guidance we published on the use of free early education entitlements funding during the coronavirus (COVID-19) outbreak.

Section 1: spring term 2021 (financial year 2020 to 2021)

Local authorities will receive their early years dedicated schools grant (DSG) funding allocations for the 2020 to 2021 financial year based on the January 2020 census count (to cover April 2020 to December 2020) and the January 2021 census count (to cover January 2021 to March 2021). In addition to this, eligible local authorities may also receive top-up funding for the spring term in their early years DSG funding allocation for the 2020 to 2021 financial year, as described below.

1.1 Eligibility for spring term top-up funding

All local authorities are eligible for top-up funding for any of the government’s 2, 3 and 4-year old early years entitlements (excepting the Disability Access Fund) if the take up of any of those entitlements, at the time of the January 2021 census, are lower than 85% of their January 2020 census in childcare attendance hours, and this take-up has then increased over the course of the term.

1.2 What is the top-up funding

As we announced in the policy guidance, funding to local authorities for the early years entitlements for the 2021 spring term will be based on the January 2021 census. However, for local authorities who may have seen a low level of early years attendance in the January census week, and then see attendance increase during the term, we will pay for the additional hours taken-up above the January 2021 census level, up to the capped value of 85% of the January 2020 census. For an eligible local authority, the size of the top-up funding is dependent on the level of attendance increase during the term. For example, if a local authorities 2-year old entitlement attendance was 1,200 part-time equivalents (PTEs) in January 2020, 800 PTEs in January 2021 and 1,100 PTEs in May 2021 then the average of January 2021 and May 2021 count is 950 PTEs, which is less than the 85% of the January 2020 cap (1,020 PTEs), therefore the local authority will get a top up equivalent to 150 PTEs taking them to 950 PTEs. The maximum limit of what we will top-up to, for each of the entitlements, is capped at 85% of the local authority’s January 2020 attendance level for the same entitlement.

1.3 How attendance increase will be measured

We will pay for the increase in attendance hours over the term for each of the dedicated schools grant (DSG) early years funding streams as described in section 1.5 – up to the level of the 85% of January 2020 cap for each entitlement. The early years entitlements include:

• 2-year olds

• 3 and 4-year olds - universal 15 hours

• 3 and 4-year olds – extended 15 hours

• maintained nursery schools (MNS) supplementary funding

• early years pupil premium

This excludes the Disability Access Fund as allocations are based on the number of 3 and 4-year olds claiming Disability Living Allowance in each council area, using data from the Department for Work and Pensions.

We have published the 85% January 2020 capped values for each of the entitlement strands for each local authority. These are represented as PTEs: for example, a child taking up 15 hours is equivalent to 1 PTE and a child taking up 12 hours is equivalent to 0.8 PTE). If at the January 2021 census, any local authorities PTE hours are lower than their published cap for any of the early years funding streams, they will be eligible for a top-up for the relevant entitlement(s), if those entitlements are shown to have then increased over the 2021 spring term. Since childcare attendance may have increased throughout the spring term, we aim to fund based on a likely mid-point attendance level. Therefore, we will use a combination of the January 2021 census at the start of the spring term and the summer count to represent this midpoint – see section 1.5.1 for further details of this calculation.

We recognise local authorities take different approaches to funding providers and when they take local attendance data. As a minimum, local authorities take at least 3 counts of attendance per year, in order to pay their childcare providers. In many local authorities these termly counts will already coincide with the termly schools census points: summer (May), autumn (October), and spring (January).

In order to measure the final attendance hours for the spring term, we are therefore asking all local authorities to carry out their usual summer term count for all their childcare providers at the same time as the summer school census week – week commencing 17 May 2021. This will ensure consistency of approach and ensure fair and transparent distribution of funding for all local authorities.

However, if the change of date to a local authorities routine summer term count presents significant issues, please contact ESFA as soon as possible, and an alternative date can be considered on a case-by- case basis.

1.4 Data required from local authorities

All local authorities should carry out the summer term attendance count for all early years childcare providers on the summer term school census week.

We require the ‘number of children’ and the ‘number of hours’ taken-up by children for the early years entitlements in the census week (week commencing 17 May 2021) for each of the early years funding strands. Local authorities need to ensure there are no duplicate entries for children. For example, if a child splits their entitlement across more than one provider, the child should only be counted once and their total funded entitlement hours at all providers the child attends should be included.

The scope of the termly data collection is the same as what is usually collected for the early years census and the school census for the settings types. We require the following data from local authorities to submit to the ESFA:

Early years entitlements	Childcare settings the local authority should collect data from
2-year olds	private, voluntary and independent (PVI) childcare providers, including childminders, school nurseries, MNS, academies
3 and 4-year olds (universal 15 hours and extended 15 hours)	PVI providers, including childminders, schools with non-registered pupils of the school (e.g. governor run schools, normally completed on the early years census), academies with non-registered pupils of the school (normally completed on the early years census)
early years pupil premium	PVI providers, including childminders, schools nurseries, MNS, academies

Note: school nurseries (with registered pupils), MNS and academies (with registered pupils) data will be collected via the 2021 summer term school census.

We will use the data already collected by the department from the 2021 summer term school census for 3 and 4-year olds in school nurseries, MNS and academies, for the universal 15 hours and the extended 15 hours. We cannot use the 2-year old data from the summer and autumn school census for funding purposes as that census data does not allow us to identify the children eligible for the 2-year old entitlement hours.

Also, we will use the data from the 2021 January alternative provision census for any children who are entitled for the early years entitlements.

We do not require the data for children in city technology colleges and non-maintained special schools as these are not funded via the DSG.

Local authorities should make their summer 2021 return on the basis of published guidance on how to conduct the usual early years January census on general principles, to ensure consistency with the usual approaches taken in a normal early years funding year. In particular see section 1.3 of the early years census guide for who is in scope of the census, and annex B for recording children temporarily absent (for example, due to sickness or on holiday), or if a provider is temporarily closed.

The deadline for submitting summer term data is 19 July 2021. Details on how to submit the data is included in section 3.1.

1.4.1 Recording stretched entitlement hours

The standard early years entitlement hours are 15 hours a week (or extended 15 hours for eligible 3 and 4-year olds), across 38 weeks a year. However, some children may ‘stretch’ the usual standard 15 hours a week, by taking up fewer hours each week across more than 38 weeks a year. For the purposes of this return, and in the same way as in the January census, the stretched entitlement will need to be converted back to a term-time only basis for both universal and extended hours. For example, where a child takes the full universal entitlement (570 hours), this should be reported as 15 funded hours. No further action is required. However, where a child takes only part of the universal entitlement, a conversion is required to calculate how many hours they take over the year. For example, a child takes 11 hours a week over 45 weeks in the year, totalling 495 hours. The full universal entitlement is 570 hours (15 hours multiplied by 38 weeks). To convert the stretched universal entitlement to the number of hours a child would attend each week if they were taking it over 38 weeks, divide 495 by 38 to get 13.03 hours.

1.5 How is the top-up calculated and applied

1.5.1 Calculating the final spring term allocation

We will use the summer 2021 term count from each local authority to calculate eligibility for the top-up for the spring term. But the summer term data count will naturally be higher than the attendance reached by the end of the spring term, as additional children become eligible for the entitlements for the first time. We aim to fund based on a likely mid-point attendance level in the spring term as attendance gradually increases during the term. Therefore, we are using a combination of the January 2021 census and the summer count to represent this midpoint as described below to determine the final ‘spring term allocation’ PTEs.

We will use an average of the January 2021 census and the summer term 2021 count. We will use the January 2021 count to represent attendance for the first half of spring term, and the summer 2021 count to represent the latter half. This aligns with the attendance picture in the first half of the term which showed a relatively shallow trajectory of increase in attendance levels, but allows for the second half of the term to increase more quickly in line with schools reopening.

1.5.2 Calculating eligibility for top-up

The process to determine the correct total spring term funding, for each early years entitlement, for each local authority, will be:

Step 1: If January (spring) 2021 PTEs is more than 85% of January 2020, then pay on January 2021. If not:

Step 2: If May (summer) 2021 PTEs is lower than January 2021, then pay on January 2021. If not:

Step 3: If the average of January 2021 and May 2021 PTEs is below 85% of January 2020, pay on the average of January 2021 and May 2021 PTEs. If not:

Step 4: Pay on 85% of January 2020 PTEs.

In order to help local authorities assess themselves whether they will be eligible for a top-up, we have published the 85% value of January 2020 PTEs for each relevant entitlement line for each local authority.

1.6 Final funding allocation for financial year 2020 to 2021

For local authorities that are not eligible for the top-up, their final funding allocation will be based on:

• nine-twelfths of the January 2020 census PTE numbers (to cover the April 2020 to December 2020 period),

plus

• three-twelfths of the January 2021 census PTE numbers (to cover the January 2021 to March 2021 period)

For local authorities that are eligible for the top up, their final funding allocation will be based on:

• nine-twelfths of the January 2020 census PTE numbers (to cover the 2020 summer and autumn terms),

plus

• three-twelfths of the final ‘spring term allocation’ PTE numbers (as described in 1.5.1)

If a local authority does not submit their summer term return, we will base the 2021 spring term funding allocation on their January 2021 census.

The 2020 to 2021 final DSG early years funding adjustments that would normally be announced in July, will be delayed as a result of the new approach. They should instead be published in November alongside the normal planned schedule to DSG update; we will endeavour to notify individual local authorities of their final allocation adjustments in September.

Section 2: early years funding approach for financial year 2021 to 2022

As we set out in the use of free early education entitlements funding during coronavirus (COVID-19) guidance, the early years funding for local authorities for the 2021 to 2022 financial year will be based on a termly count.

2.1 How local authorities will be funded in 2021 to 2022

2.1.1 Summer 2021

For the 2021 summer term, we will use the same data count from local authorities and schools in May 2021 (the hours taken during census week commencing 17 May 2021), as described in section 1.4, to determine the funding allocations for the 2021 summer term in full. Funding for the 2021 summer term will have no reference to the January 2021 census, unless the authority does not make a proper return (see section 2.2).

2.1.2 Autumn 2021

For the 2021 autumn term, we ask all local authorities to carry out their usual autumn term count for all their PVI childcare providers at the same time as the autumn school census week – week commencing 4 October 2021. The data count should be taken in the same way as described in section 1.4 for the relevant settings. We will use the 2021 autumn term school census data for 3 and 4-year olds in school nurseries, MNS and academies with registered pupils of the schools. The October data count (the hours taken during census week commencing 4 October 2021), will be used to determine the funding allocations for the 2021 autumn term. Funding for the 2021 autumn term will have no reference to the January 2022 census, unless the authority does not make a proper return (see section 2.2).

If the change of date to a local authorities routine autumn term count presents significant issues, please contact ESFA as soon as possible, and an alternative date can be considered by exception, on a case-by- case basis.

The autumn term data should be submitted to ESFA in the same manner as described in section 3.1. The deadline for submitting autumn term data is 13 December 2021.

2.1.3 Spring 2022

For the 2022 spring term, we will use the data from the usual annual 2022 January census and the data will be processed in the usual way.

2.2 If an authority does not submit termly data

Local authorities must submit attendance data for both the summer and autumn terms in order to be paid on attendance for either term. If any of the following criteria are not met, we will fund local authorities for the summer 2021 term based on the January 2021 census, and for the autumn 2021 term based on January 2022 census:

• a local authority does not submit data for both the summer and autumn terms

• any of the information in the data collection template is not fully completed when submitted

• the data return is not signed off by the Section 151 officer

Note: if only one termly count is submitted, the local authority will be funded as in a usual year, the summer 2021 term would be based on the January 2021 census, and the autumn 2021 term based on the January 2022 census.

If a local authority is not intending to submit the termly data, we will require a ‘nil’ response from the local authority to confirm they are not submitting the information.

2.3 Funding allocation methodology for 2021 to 2022

In summary, the DSG early years final funding allocation for 2021 to 2022 will be based on the following:

• five-twelfths of the May 2021 count PTE numbers (to cover the April 2021 to August 2021 period), plus

• four-twelfths of the October 2021 count PTE numbers (to cover the September 2021 to December 2021 period); plus

• three-twelfths of the January 2022 census PTE numbers (to cover the January 2022 to March 2022 period)

For 2-year olds, and 3 and 4-year olds universal 15 hours and extended 15 hours, the final allocations for each local authority will be calculated as follows:

• the total number of PTEs taking up the entitlements as recorded on the counts in May and October as above, plus alternative provision census

• multiplied by 15 hours × 38 weeks × local authorities 2021 to 2022 hourly funding rate

For the early years pupil premium, the final allocation for each local authority will be calculated as follows:

• the total number of PTEs taking up the EYPP as recorded on the counts in May and October as above, plus alternative provision census

• multiplied by 15 hours × 38 weeks × £0.53

For MNS supplementary funding, the final allocation for each local authority will be calculated as follows:

• the total number of PTEs taking up the universal 15 hours in MNS as recorded on the counts in May and October as above, plus alternative provision census

• multiplied by 15 hours × 38 weeks × local authorities 2019 to 2020 supplementary funding rate

The initial early years funding allocations for the financial year 2021 to 2022 (published in December 2020) will be updated in January 2022 to show the adjustments for the summer and autumn terms. Local authorities will not see adjustments for payments until January 2022. Final funding allocations for 2021 to 2022 will be published in July 2022 as per the usual timetable.

Section 3: how to submit data and key dates

3.1 How to submit the data

Local authorities will need to submit the data using an online form available via ESFA data collection portal.

All the data submitted to ESFA must signed off by the local authorities Section 151 officer to provide proper assurance, given that the data is being used for national funding purposes.

The form should be submitted to ESFA by 19 July 2021 for the summer term data and 13 December 2021 for the autumn term data by return through the ESFA data collection portal.

If the deadlines poses a significant problem to a local authority, then they are asked to contact the ESFA as soon as possible at APTSubmissions.questions@education.gov.uk.

3.2 Summary of key dates

	Activity	Key dates
Data collection and deadlines
Summer term 2021	Summer census week	Week commencing 17 May 2021
	School census closes	7 July 2021
	Deadline for local authorities to submit summer term data to ESFA	19 July 2021
Autumn term 2021	Autumn census week	Week commencing 4 October 2021
	School census closes	1 December 2021
	Deadline for local authorities to submit autumn term data to ESFA	13 December 2021
Publication of updates to early years DSG allocations
Funding for financial year: 2020 to 2021	Update to final funding allocation for 2020 to 2021	November 2021
Funding for financial year: 2021 to 2022	Update to 2021 summer and autumn term adjustments	January 2022
	Update to final funding allocation for 2021 to 2022	July 2022