Coram PACEY Policy Team

The Department for Education (DfE) is consulting on proposed changes to how early years entitlement funding is allocated in England. It is important that childminders have a strong voice in this consultation. 

Coram PACEY recently held a focus group between the Department for Education and registered childminders to begin discussions about the funding system and how childminders can engage in this consultation. 

The consultation is technical – with 34 questions in total – but you do not need to be an expert in funding formulas to respond. DfE needs to understand how its proposals will affect the people delivering funded childcare every day. You can find the consultation document including the full set of questions and proposals here. 

This is now an opportunity for everyone to tell DfE, in your own words, what works (and what doesn’t) about the funding system when you are trying to run a sustainable childcare business while delivering funded places.  

Below, we have highlighted some of the key themes and questions, with prompts to help you consider your response. You do not need to answer every question or cover every issue. Respond to as many or as few as you wish. It is better to share your experience than not respond at all. The more childminders who speak up, the stronger the evidence we can put forward about what needs to change. 

The DfE proposals aim to make funding simpler, more consistent and more accountable while directing support towards the children and families who need it most.  

The consultation closes on 14 September 2026.

SEND funding

Part of the consultation focuses on SEND funding and how improvements can be made to streamline and improve funding to drive the impact of spending and ensure timely support for children (see consultation page 13 onwards).  

Upfront inclusion funding 

The DfE makes proposals on ‘upfront inclusion funding’ which is funding that is provided to settings to improve inclusion, not linked to individual children or requiring a targetted application.  

For 2026-27, this funding was distributed through the Inclusive Early Years Fund (IEYF). Coram PACEY previously raised concerns that the DfE’s recommended approach included a £1,000 minimum spend, which risked directing funding towards larger settings and leaving smaller providers, including childminders, left out. However, it has been positive to hear examples of local authorities taking their own approach to distributing IEYF and ensuring that childminders are able to benefit from this funding. 

The DfE consultation document proposes actively including childminders and other providers in funding allocations in future years of spending – a proposal we would strongly support: 

Question 11 asks: When distributing upfront inclusion funding (currently IEYF), should local authorities ensure that all providers receive funding? How should providers use this funding where sums of money are small? 

It also proposes building this funding into core funding rates in future as a mandatory inclusion supplement (question 12).  

You may wish to consider…  

• As a childminder, have you received any upfront inclusion funding? What did/will you spend it on?  

• What kind of impact did, or would, this funding have for your setting and the children you support?  

• If you have not received any inclusion funding, what kind of barriers do you face and how might that funding help you? 

Other streams of SEND funding 

All providers can also currently apply for SEN Inclusion Funding (SENIF) and Disability Access Funding (DAF). We know that the awareness of, and take up of these funding streams are lower among childminders compared to other provider types, and the process and amount of funding available can differ depending on where a provider is based.  

Question 14 asks: Do you agree we should replace SENIF and DAF with a new targeted funding stream for providers to access? 

The aim is to replace SENIF and DAF with a new funding scheme to improve simplicity and consistency. Local authorities would still manage the funding, but there would be clearer national guidance about how the process should work. In the shorter term (2027 to 2028), the Government is proposing that local authorities should spend at least 0.75% of their early years funding block on SENIF (Q17). 

You may wish to consider… 

• Are you aware that you may be eligible to apply to SENIF and DAF funding as a childminder?  

• How do you find the mechanisms for applying for these streams?  

• What works well, or does not work well, when you apply for SEND funding now? 

• Would one application process make it easier for you to access funding?  

Funding and accountability 

The DfE is proposing accountability measures to evidence that inclusion funding leads to practical improvements for children and families. Providers receiving funding may therefore be required to demonstrate how it has supported more inclusive practice. 

While accountability is important, Coram PACEY is keen to ensure that any requirements are proportionate to the size and scale of settings. Childminders often work alone and manage all administrative requirements themselves, so reporting processes should be clear, simple and proportionate, particularly for childminders and small providers. 

On p.21, the DfE states that providers could be ineligible for funding if they are considered to be “unreasonably restricting access” or if there is “insufficient assurance” that funding is being used to improve inclusive practice. We are concerned that these terms lack sufficient clarity and could be open to inconsistent interpretation at local level. The proposals do not make clear how local authorities will apply these requirements consistently, what evidence would be considered sufficient, or what opportunity providers would have to address concerns and resubmit evidence before funding is withheld. 

Question 18 asks: What accountability arrangements should be in place to ensure inclusion and SEND funding is improving inclusive practice in settings? 

You may wish to consider… 

• What would be a simple and reasonable way for childminders to show how funding has been used? 

• What evidence do you already keep (perhaps for the SENIF funding if you receive this) that could be used, without creating extra paperwork? 

• What changes would show that the funding is making a difference for children? 

• What support would childminders need from their local authority?

Supporting low-income and disadvantaged families 

Another focus in the consultation is how funding could better support disadvantaged children. The DfE is proposing that from April 2027, more Early Learning for 2s (EL2) funding would reach providers to help improve access to childcare places for families eligible for EL2 where take up is currently low – a proposal that Coram PACEY supports.  

It also asks for views on whether, from April 2028, funding for disadvantaged children should have a clearer purpose and a guaranteed minimum level to help more children access early education and childcare. 

Question 7 asks: Do you agree with the Department setting out more clearly how the deprivation supplement should be used, setting a minimum level and clearer purpose to this funding so it more directly supports disadvantaged children? 

The DfE also proposes to use the new 2025 Income Deprivation Affecting Children Index (IDACI) data for the three- and four-year-old funding formula for consistency alongside Free Sschool Meals data, as it is currently used for two-year-old and under-twos funding.  

You may wish to consider… 

• What barriers do you think lower-income families face when trying to access childcare? 

• What barriers do childminders experience in offering places to lower-income families, and is there any support that would make it possible to continue doing so?  

• Do you currently receive a deprivation supplement? If so, how do you use it? How could additional funding be used to make the greatest difference to children and families? 

Expectations for delivering Best Start in Life

As part of the Government’s Best Start in Life (BSiL) ambition, the DfE is considering how local services work together, including childminders, nurseries, schools, Family Hubs, health visitors, local authorities and other organisations that support families. 

Question 9 asks: How can providers best be involved and play an active role in the development and delivery of the Best Start Local plan and Best Start Family Hub network? 

While childminders play an important role in identifying when families may need extra support and helping them access local services, at Coram PACEY we do hear limitations to how involved childminders are considered in BSiL plans.  

You may wish to consider… 

• How involved do you feel in your local authority’s BSiL plans?  

• Have you accessed any support via the Family Hubs model? Did you know it was available to you?  

• Have you got any experience of working in partnerships with other settings, services or organisations?  

• What challenges make partnership working difficult for a childminder? And how could local authorities and DfE better support childminders to play this role?

Ofsted Early Years Register fees

The consultation includes a proposal (Question 32) to absorb some, or all of Ofsted’s Early Years Register costs through a top-slice of entitlement funding, rather than a separate, fixed annual payment. There is no confirmation of how much this would impact funding rates – or how it might change over time. The proposal also relates to the Early Years Register only, with no information on how childminders or other providers registered on the Childcare Register, either alongside or instead of the Early Years Register, would be affected. 

Question 32 asks: Would you support some of Ofsted’s Early Years Register costs being funded through a top-slice of early years entitlement funding, in order to reduce or remove individual provider Early Years Register annual fees?

You may wish to consider… 

• Does the annual fee currently impact the way that you work?

• Are you registered on one or more registers? How does this affect you?
• Would absorbing some or all of the yearly fee into your early years funding rate be preferable to paying a yearly fee?

National funding formula changes

The DfE talks about plans for ongoing improvement and future changes to the EYNFF. In particular, it talks about looking at providers’ “ability to raise revenue outside of government funding ahead of 2028-29 to inform future formula design” (p.26). We would like more clarity on this, as we are already seeing issues developing around local authority involvement or over-reach on a provider’s privately earned income outside of funded entitlements.  

Local authority contingency funding

One of the consultation proposals is for local authorities to redistribute unused contingency funding (e.g. where early years demand has been lower than expected) to providers, instead of it being absorbed into wider parts of the Dedicated Schools Grant (DSG).  

Question 24 asks: Do you agree with the proposal to make it possible for local authorities to distribute emerging early years contingency funding underspends to providers during the year?

Other considerations

What falls outside of the scope of the consultation, but worth bringing up?  

The consultation is largely around redistributing existing funding, rather than finding out whether funding rates are enough to cover your costs and allow you to operate sustainably.  

Question 34 invites any additional comments about the DfE’s proposals

Here it may be worth thinking about the bigger picture of… 

• Does the funding rate you receive cover the actual costs of providing funded childcare? 

• Does the funding system recognise the scale and structure of a childminding business? 

• Are there particular administrative or financial burdens associated with claiming funded hours as a childminder? 

• Are local authority processes easy to understand and do systems work smoothly? What could be simplified?  

• If you could change something about the funding system , what would it be? 

We would be grateful if as many childminders as possible could engage directly with the consultation so that the DfE sees the impact of our community. If you would prefer to contact us with your insights on the funding system as a childminder, please do so: policy@corampacey.org.uk.  

Coram PACEY’s ongoing policy work

Separately, the Competition and Market’s Authority’s (CMA) study into childcare and early years is ongoing, with a much wider scope than the proposals covered by the DfE’s funding consultation. Coram PACEY is feeding into both processes, making sure your voices and experiences are heard. Overall, the hourly rates in the current funding system are based on nursery ratios, not childminder ratios, so it will never work effectively or sustainably for childminders.  

We are also undertaking a major piece of work to explore how the childminder funding system could be remodelled to work better for childminders and support a sustainable future for the sector. Importantly, this looks at the wider issue of funding rates (particularly the very low three- and four-year-old rates) and the unfair rule that prevents childminders from claiming funding for relatives.  

Follow our social media pages (@corampacey) and bookmark our website for more information and updates on our work in these areas. Alternatively, you can sign up for our newsletter.