The code of practice on the provision of free nursery education places for three and four-year-olds is statutory guidance to which local authorities must have regard, when planning and managing the delivery of the free entitlement. The code requires local authorities to ensure settings are funded equitably, transparently and fairly, according to local need and market dynamics. My letter in December 2006, to all local authority chief executives asked them to reassure themselves that their funding levels support a diverse local childcare market and take into account provider sustainability. Local authorities are responsible for ensuring that funding is allocated and spent appropriately.
Last month, we announced a series of changes to how local authorities fund the free entitlement to early learning and care for three and four-year-olds, designed to ensure that local funding allocations are transparent and consistent across the sectors, and give providers stability to plan for the future and improve quality.
Availability of free early years education is within the scope of Ofsted’s annual performance assessments of local authority children's services.