How early education is funded

Funding paid to childcare providers must be used to deliver the early years entitlements hours to each eligible child. These hours must be free to the family at the point of delivery, with no condition of access. 

You can view an overview of how funding is distributed in our funding formula factsheet.

Base rate funding for 2026/27

Deprivation supplement

Children aged 3 and 4 who live in a postcode of deprivation and were counted at your setting in the early years census in January are eligible for a deprivation supplement.

This year, we are paying for universal and working parent entitlement hours. The rate is approximately £250 per child based on a 570-hour place. Any hours over this will be paid pro rata.

Your payment will be split over three termly amounts.

Quality supplement

If you have invested in a graduate-led practice in your setting, you will receive the quality supplement. 

This supplement is available to private and voluntary settings, including day nurseries, pre-schools, playgroups, childminders and school nurseries.

The quality supplement is paid in three equal amounts at each half term. The annual rate for settings with graduate leaders who have achieved Early Years Teacher (EYT) status, Early Years Professional (EYP) status or Qualified Teacher Status (QTS) is:

• £1250 for group settings (settings can apply for up to two graduates)
• £500 for childminders
• £3500 for school nurseries

Early Years Pupil Premium (EYPP)

This is additional funding for early education providers to support the education of disadvantaged children. 

It's paid at the national rate of £1.15 per hour for eligible children claiming a free place. This equates to an additional £655.50 for a child receiving the full 570-hour entitlement.

You can find out more about EYPP.

Disability Access Fund (DAF)

This supports funded children in receipt of Disability Living Allowance (DLA) to access an early education place and is a one-off payment of £975 per financial year.

To claim disability access funding for an eligible child, providers must upload a copy of the child's Disability Living Allowance award letter to the child's record on the Education Portal. This letter will also be required if your setting is audited. 

DAF is paid in the first term that a child claims early education funding. Once the funding has been paid to a provider it cannot be transferred. It cannot be used to pay for additional hours at the provider.

You can read more about DAF.