Ministers say the current system is flawed because it is out of date and full of anomalies, which make it unfair and overly complex.
The Government is proposing to introduce a new funding system for pupils aged three to 16.
The funding for all free early education - for private, voluntary and maintained settings, including nursery schools and nursery classes - is included within the overall school funding system, with local authorities responsible for funding providers.
Around half of the free entitlement provision for threeand four-year-olds is delivered in schools.
A further consultation taking into account responses is due in early summer.
Section eight of the consultation asks for opinions on how the Early Years Single Funding Formula has been implemented and how it might be improved. It says, 'If a fair funding formula is introduced for reception to Year 11 provision, there will obviously be implications for how free early education funding will operate.'
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