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Government reveals plans for new free places funding system

Ministers are planning to introduce a new national funding formula for all early education places.

The proposal is included in a Department for Education consultation that sets out changes to how local authorities will be expected to work with early years providers, alongside draft statutory guidance, which will come into force in September.

The Government wants to take a new approach to funding early education places for three- and four-year-olds, based on the model used to devise funding allocations for disadvantaged two-year-olds places, published last November.

This calculated an average hourly rate for the two-year-old places for 2013-14 of £5.09, and the Department strongly recommended that local authorities use a flat base rate for all providers with no supplements, as the offer is focused on deprived children.

The DfE intends to make this a requirement from 2014-15, but will maintain the option to find on place basis, rather than solely on participation, while provision is increasing to meet the new statutory entitlement to provide places for 40 per cent of two-year-olds.

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