Guidance

Early years teachers’ pay additional grant (EY TPAG) 2023 to 2024: methodology and operational guidance

Published 16 November 2023

This guidance was withdrawn on 4 September 2024

Find the latest guidance for early years teachers’ pay additional grant in the Local authorities: pre-16 schools funding collection.

Applies to England

1. Overview

In July 2023 we announced £525 million to support schools with the September 2023 teachers’ pay award in 2023 to 2024, with a further £900 million in 2024 to 2025. This funding has been split between mainstream schools, special schools and alternative provision (AP), early years, and 16 to 19 provision. The split reflects relative pupil numbers, and core funding amounts, across these different types of provision.

For the 2023 to 2024 financial year, £12.5m of this funding will be provided to local authorities to support early years providers delivering the government’s early years entitlements with increased teacher workforce costs from 1 September 2023.

This funding will be distributed via the early years teachers’ pay additional grant (EY TPAG). The EY TPAG will be paid to local authorities to cover the 7-month period between 1 September 2023 and 31 March 2024.

For the 2024 to 2025 financial year, £22.5m funding for teachers’ pay in early years will be incorporated into local authorities’ core funding arrangements, through the early years funding block of the dedicated schools grant (DSG), rather than through a separate teachers’ pay grant.

This guide explains how we have distributed EY TPAG funding to individual  local authorities.

2. Eligibility for the grant

All local authorities in England that fund early years provision are eligible to receive the EY TPAG. Though to note: 2 local authorities, South Gloucestershire and Hampshire, have not received an EY TPAG allocation, this is because they did not receive a large enough portion of pay grant funding to deliver 1 pence uplift through ‘core’ TPAG rates, and in the case of Hampshire is also subject to the maintained nursey schools (MNS) funding cap for 2023 to 2024 and so did not see a MNS TPAG rate. The Isle of Scilly and City of London are excluded from these allocations

In turn, all local authorities in receipt of the EY TPAG will be required to pay their early years providers in accordance with the EY TPAG conditions of grant.

3. Funding rates methodology

As far as possible, the approach we have taken to calculate EY TPAG hourly rates is in line with the way we incorporated the historic teachers’ pay grant (TPG) into core funding arrangements in 2023 to 2024. This is to ensure that we have given consistent treatment to funding in relation to teachers’ pay across the same financial year. For more information on how we rolled in TPG funding, see 2023 to 2024 technical note.

These rates have also been calculated with reference to the mid-year uplifts local authorities received under the early years supplementary grant (EYSG) to ensure they reflect local authorities’ most recent funding position.

This means we have notionally apportioned the £12.5m funding between the 3‑ and 4-year-old early years national funding formula (EYNFF) entitlement and MNS supplementary funding in the same proportions as was applied with roll-in of the historic teachers’ pay grant (TPG). We have therefore added £10.7m to the notional EYNFF envelope for 2023 to 2024 and £1.75m to the amount notionally available for MNS supplementary funding, to recognise the proportion of funding historically allocated to these settings and to acknowledge the additional costs that MNS will face as a result of the increase to teacher pay.

The amount of EY TPAG funding that local authorities therefore receive will be calculated using 2 hourly rates:

1) a ‘core’ TPAG hourly rate and 2) an MNS TPAG hourly rate

Each rate is multiplied by a local authority’s part-time equivalents (PTE) count, based on January 2023 universal and additional hours PTEs, to produce each authority’s total allocation under the grant.

4. Calculating ‘core’ EY TPAG rates

Core TPAG rates have been calculated using the EYNFF, including the formulae weightings and factors used to calculate the original 2023 to 2024 rates for the early years block of the DSG , with the same data sources, with a few changes which are detailed below. This methodology is set out in the 2023 to 2024 early years funding formulae: technical note, with further detail on the mid-year uplift we delivered to local authorities through the EYSG available in the Early years supplementary grant 2023 to 2024: methodology .

Change 1: updating 2023 to 2024 universal and additional hours total funding.

For the purposes of using the formula to create the EY TPAG rates, a notional 2023 to 2024 universal and additional hours entitlement total allocation for a full year was created to reflect the additional funding made available through the EY TPAG, on top of that provided at the spring budget and paid through the EYSG.

Change 2: creating a new baseline.

TPAG rates have been derived by first calculating a notional amount that each local authority would receive if the additional funding for 2023 to 2024 were spread across local authorities in the same proportion as when the historic pay grants were rolled into core funding arrangements.

For example, in 2023 to 2024, if a local authority received 1% of the money that was being rolled-in in respect from the historic TPG, under the TPAG that local authority would be apportioned 1% of the additional funding available.

Dividing this notional local authority level amount by their universal and additional hours January 2022 PTEs, and by 15 hours and 38 weeks, then rounding to the nearest penny, gives a pence uplift that we then add to each authority’s baseline (the rate local authorities are receiving from September 2023 following the EYSG) to create a new baseline.

Change 3: Minimum funding floor (MFF)

To reflect the additional funding available as a result of the EY TPAG, we have also updated the MFF for 2023 to 2024. The minimum funding floor means that with the addition of TPAG funding, no local authority sees a funding rate for 2023 to 2024 (including their DSG and EYSG rates) lower than £5.23. This MFF has been derived by taking the difference between the universal hours average rate for 2023 to 2024 – that is once funding for EY TPAG has been added to that allocated under EYSG and 2023 to 2024 DSG - and the average funding universal hours rate under the EYSG.

5. EY TPAG hourly amounts

The additional TPAG funding is then distributed using the 3- and 4-year-old EYNFF to determine each local authority’s hourly rate, using the new baseline and the new MFF. The rates the EYNFF produces are inclusive of local authorities’ effective combined rate (as per the EYSG) and their TPAG rate. To calculate a local authority’s final core TPAG rate we therefore deduct their effective combined rate from the model output.

Core TPAG hourly rates provide an uplift for local authorities that is either the uplift given by the new minimum funding floor or the uplift given by their new/revised baseline hourly rate.

There are 3 local authorities (South Gloucestershire, Hampshire and West Sussex) who are not on the minimum funding floor, and historically, did not attract a large portion of TPG funding. In these cases, the notional amount added to their baseline is insufficient to provide a TPAG rate uplift. These local authorities will not receive an allocation through the ‘core’ TPAG rate.

6. Maintained nursery school (MNS) TPAG rate

To determine the MNS TPAG rate, we have applied a similar method used in calculating core TPAG rates.

We have calculated local authority level notional TPAG allocations for MNS supplementary funding by distributing £1.75m total to local authorities according to the proportion of the historic pay grant each authority received when we rolled in the historic teachers’ pay grant (TPG) into MNS supplementary funding in 2023 to 2024.

Dividing this total by MNS universal  hours January 2022 PTEs, and by 15 hours and 38 weeks, then rounding to the nearest penny, gives a pence uplift that we then add to each local authority’s MNS supplementary funding pre-protection baseline (that is the pre-protection rate local authorities are receiving from September 2023 following the EYSG) to create a new baseline.

We then apply an updated minimum MNS supplementary funding rate of £4.20. This increase has been calculated by taking the difference between the current minimum funding rate of £4.01 (as per EYSG), and the average rate of the new baseline rates created above.

We then apply the MNS supplementary funding cap of £10 per hour or the transitional arrangement for 2023 to 2024, meaning that the 2 local authorities (Westminster and Hampshire) with funding rates at this level will not see an uplift via the MNS TPAG rate.

MNS TPAG hourly amounts

The rates produced are inclusive of local authorities’ current MNS rates (as per the EYSG) and their MNS TPAG rate. To calculate a local authority’s final MNS TPAG rate we therefore deduct their current rate from this rate.

MNS TPAG hourly rates provide an uplift for local authorities that is either the uplift given by the new minimum funding floor or the uplift given by their new baseline hourly rate, excluding those authorities affected by the cap.

7. Paying the grant

Local authorities in England will receive allocations under the EY TPAG to cover the period 1 September 2023 to 31 March 2024.

Local authorities will receive their payments for 2023 to 2024 in a single payment at the end of November 2023.

8. Allocations

Allocations for the EY TPAG will be paid based on PTE data from the January 2023 early years, schools and alternative provision censuses.

There will not be any further adjustment to the EY TPAG allocations.

9. Local authority funding to providers

We are providing local authorities with the flexibility to determine the most appropriate way of allocating EY TPAG funding locally. Local authorities should refer to the EY TPAG conditions of grant which sets out the permitted use of TPAG and detail how the funding should be passed on to providers.

10. Conditions of grant

The EY TPAG is subject to our conditions of grant.