The code of practice on the delivery of nursery education for three and four-year-olds requires local authorities to ensure settings are funded equitably, transparently and fairly, reflecting local need and circumstances. My letter in December 2006 to all local authority chief executives reiterated this point and asked them to reassure themselves that their funding levels support a diverse local child care market and take into account the impact on provider sustainability.
The Schools, Early Years and 14-16 Funding consultation which closed on 1 June set out a number of proposals for changes to the way the early years funding system operates. As part of our consideration of these options and to assess their impact, the Department is developing a more comprehensive evidence base of current practice around the country. We have asked all local authorities to complete a questionnaire, setting out how they allocate and distribute free entitlement funding to maintained schools and to private, voluntary and independent (PVI) providers. We are also working with authorities to produce estimates of the level of funding allocated to early years in each local authority and its distribution between the PVI and maintained sectors in 2005-06 and 2006-07.
We intend to collate and publish both the questionnaire responses and the levels of funding in each local authority so that authorities can benchmark their approaches to funding the free entitlement.