Nursery Education Grant Funding

The Nursery Education Grant funds free childcare and education for 2 to 4-year-olds

When choosing childcare, it is important to remember that all 3 to 4-year-olds in England can get 570 hours of free early education or childcare per year. This is usually taken as 15 hours each week for 38 weeks of the year. This is funded by the nursery education grant from local authorities of about £3.80 per child, per hour.

If the child attends a state-maintained nursery or a local authority funded children’s centre, it is unlikely that the parent will be asked to contribute anything further but those with children in popular private nurseries, and even in pre-schools run by voluntary organisations, will know the government entitlement is often not truly free at the point of use. This particularly true in London and the South East.

Local authorities set different rates for the hourly nursery grant. However, this funding has widely stagnated, with most local councils giving no year on year increase. Certainly any increase given has rarely been in line with inflation.

The rising costs faced by nurseries

Across the board, nurseries are facing rising costs, due to increases in pay, business rates and utilities. The result is that funding for every 3 or 4-year-old falls short by an average of £800 a year according to research conducted by the National Day Nurseries Association (NDNA).  In fact, the NDNA has reported underfunding in 6 successive surveys over the past 4 years.

The NDNA research suggests £3.80 is the average funding for nurseries, per child, per hour. However, the Pre-School Learning Alliance says grants for the existing 15 hours fall, on average, 20% short of the true cost. As a result, often nurseries in the independent and voluntary sector are forced to look to parents to make up the shortfall.

Extra hourly fees are not legal, but nurseries have worked out ways to sidestep this. The most common technique is requiring parents to take more than the total number of free hours and charging a set fee for the extra time. This extra time can be as little as 15 minutes on top of a three-hour session.

Another way is limiting the flexibility of the way sessions are used, for example, requiring parents to use the free hours in specified 3 hour sessions, but limiting these to 2 sessions per day. The outcome of this is that private nurseries can struggle to survive in areas where parents are less likely to require hours in addition to the free hours. This can lead to a lack of childcare provision in the most deprived areas, which impacts on the ability of parents to enter employment.

Nurseries are also subsidising from other parents of younger children, who typically pay a higher hourly fee – in part because the staff ratios to babies are lower – and use registration fees and one-off administration charges, not to mention paying to go on waiting lists for places, to fill gaps.

How do I apply for the free 15 hours the Nursery Education Grant provides?

Parents do not need to apply directly for the nursery grant funding. Each term the childcare provider will claim on behalf of the parents for the number of sessions their child will be attending, and the Local Authority will then pay the funding directly to the provider. The funding is not paid directly to parents – the fees will simply be reduced to reflect the number of free hours the parent wishes their child to receive.

When can I claim free nursery education hours for my 3 – 4 year old?

You can start claiming free childcare after your child turns 3. The date you can claim will depend on when their birthday is.

If your child is born between They are eligible for a free place from:
1 January to 31 March The beginning of term on or after 1 April
1 April to 31 August The beginning of term on or after 1 September
1 September to 31 December The beginning of term on or after 1 January

For example, if your child was born on 15 February 2012. They can get free early education and childcare from the start of term following 1 April 2015.

The free early education and childcare can be used at:

  • All types of nurseries and nursery classes
  • Playgroups and pre-schools
  • Childminders
  • Sure Start Children’s Centres

Contact your local council for more information about free early education and childcare in your area.

When can the free early education and childcare sessions be used?

Children are able to take up their full entitlement to free early education at times that best support their learning, and at times which fit with the needs of parents.

Statutory guidance to local authorities on the delivery of the free 15 hours of education states that Local Authorities should:

  • Fund providers to deliver free early years provision for 3- and 4-year olds at times and in patterns that support parents to maximise the use of their child’s entitlement
  • Encourage providers to offer flexible packages of free early education, subject to the following standards on flexibility:
  • No session longer than 10 hours
  • No session shorter than 2.5 hours
  • Not before 7.00am or after 7.00pm
  • As a minimum ensure that parents are able to access their child’s free early education place in the following patterns:
  • 3 hours a day over 5 days of the week
  • 5 hours a day over 3 days of the week
  • Enable parents to take up patterns of hours which “stretch” their child’s entitlement by taking fewer free hours a week over more weeks of the year, where there is provider capacity and sufficient demand from parents
  • The above guidance means that you should have some flexibility over when to take the 15 hours to suit your needs and circumstances. However, each childcare provider may have its own rules and restrictions.

Childcare providers are being encouraged to offer the places more flexibly, meaning that you may be able to stretch the free sessions over more weeks of the year by using less hours each week, or by using the 15 hours over a minimum of two days per week. If your child has a place at a provision which is open all year, it is important to check how many weeks in the year they will be funded. The funding only covers 38 weeks a year to tie in with the state school calendar and there may be periods not covered by the funding when you may be expected to pay full fees for example at Christmas, Easter and Summer Holidays. It’s always worth speaking to your existing or prospective childcare provider to see what they offer.

Because you don’t need to pay anything for these places, you can’t be forced to pay for meals or activities during these hours. It should be up to you whether you pay for additional services, such as extra meals or additional hours of care. It is worth asking for a full breakdown of how the fees are charged at your first meeting with the childcare provider and also whether the free places are even offered. Your local Family Information Service (FIS) can provide you with further information on which childcare providers offer the free places.

Can 2-year-olds benefit from the Nursery Education Grant?

Some 2-year-olds in England can get free early education and childcare.

You must be getting one of the following:

  • Income Support
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Support through part 6 of the Immigration and Asylum Act
  • Child Tax Credit and/or Working Tax Credit and have an annual income under £16,190
  • The guaranteed element of State Pension Credit
  • The Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)
  • Universal Credit

Children are also entitled to a place if:

  • They’re looked after by a local council
  • They have a current statement of special educational needs (SEN) or an education health and care plan
  • They get Disability Living Allowance
  • They’ve left care under a special guardianship order, child arrangements order or adoption order

If your child is eligible, you can start claiming after they turn 2. The date you can claim will depend on when their birthday is.

If your child is born between They are eligible for a free place from:
1 January to 31 March The beginning of term on or after 1 April
1 April to 31 August The beginning of term on or after 1 September
1 September to 31 December The beginning of term on or after 1 January

Contact your local council to check if your child is eligible.

30 hours of free childcare

Since September 2017 the government offers an additional 15 hours free childcare (hence the title 30 hours free) to those that meet the eligibility criteria. Both parents must be working and must each expect to earn (on average) at least £120 a week and below £100,000 per annum. If you, or your partner, are on maternity, paternity or adoption leave, or you’re unable to work because you are disabled or have caring responsibilities, you could still be eligible. It is only applicable to those in England. Confirmation is required every three months to ensure you still meet the criteria.

For more information as to what is available and to register for funding available to you visit


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