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Free childcare: Preparing Your Nursery For 2024/2025 Funding Entitlement Changes

In the 2023 Spring budget, the government announced the extension of their free childcare scheme, more than doubling the support on offer to working parents. For many childminders and nurseries, keeping up with the changes and preparing their business has been a challenging process. In this blog we explore the upcoming funding entitlement changes, the impact these may have on Early Years providers, as well as some strategies on how to make sure you are ready.

Understanding the 2024/2025 Funding Entitlement Changes

In April 2024, the extension of childcare support for families will begin and by September 2025, most working parents with children under the age of 5 will be entitled to 30 hours of free childcare.

Considering the scale of this expansion, the changes are being introduced gradually to make sure childcare providers in England can meet the demands of more families. In summary, the staggered rollout:

From April 2024: Eligible working parents of 2-year-olds will be able to access 15 hours of childcare support.

From September 2024: 15 hours of childcare support will be extended to eligible working parents of children from the age of 9 months to 3 years.

From September 2025: Eligible working parents with a child from 9 months old up to school age will be entitled to 30 hours of childcare a week.

There are not currently any proposed changes to the funding entitlement for 3-4 year old children. In the table below we have broken it down clearly by age and eligibility:

A table showing funded childcare entitlement broken down by timeframe and age group

As with the current 3-4 year old offering, working parents will need to access their own eligibility and apply online via the website and provide their preferred childcare setting with their eligibility code.

Impact on Nurseries 

While the 2024/2025 changes in funding entitlement aim to provide better support for families, some nurseries may face challenges in adapting to these updates. Although the sector’s response has been mostly positive to the changes, there are some concerns around increased demand, staffing requirements and administrative adjustments.

With increased demand, parents may struggle to find their child a place at a local nursery. Some providers are already at full capacity with huge waiting lists, whilst others have places but not enough staff to fulfil the legal ratios. Recruitment of qualified staff has been a challenge for some time, however the government has recently launched a campaign for Early Years careers to tackle this for the future.

Alongside this, as a whole the sector is already struggling financially, with an increased number of settings closing their doors for good last year. However, the local authorities that have published the funding rates all seem to be around £8 which is a huge improvement on the approximately £5 providers were getting previously.

Suggested Strategies

We have compiled a few strategies and ideas to help you navigate these changes smoothly:

Staffing and Scheduling: Consider reviewing your staffing structure to ensure you have sufficient resources to meet the increased demand for places. Collaborate with your team to establish flexible shift patterns in case you need to make adjustments to align with parents’ needs. If you have vacancies, start the recruitment process in advance to give time to find new staff and train them. You can post jobs for free here on Jobs by eyrecruit, a job board dedicated to the Early Years sector.

Communication: Keep parents informed and involved in the process to reduce the number of questions you receive later on. Clearly communicate the funding changes, eligibility criteria, and how they will impact their child’s nursery journey. Review and update your nursery’s policies to reflect the revised entitlements, ensuring transparency and clarity.

Administration: Review and invest in technology to help streamline your administration processes and save your team precious time that could be spent with your children. eyworks nursery management system allows you to add funding terms, bulk assign funding to children, copy funding entitlement across terms and set multiple 2 year funding rates to calculate an accurate income forecast. Funding is then automatically added to a child’s invoice alongside any formulated consumable charges making administration quick and easy.

Financial Planning: Analyse and reassess your nursery’s financial plans to accommodate the changes in funding and ensure consumables and extra services are priced accordingly. Seek professional advice to ensure your budget remains sustainable while delivering exceptional care and education to children.

As we move forward into the 2024/2025 academic year, the changes in parental funding entitlements bring both opportunities and challenges for nurseries. By understanding the adjustments to funding hours and eligibility criteria you can proactively address the impact on your nursery. Embracing strategic approaches such as staffing adjustments, effective communication, collaborations, and financial planning will aid in successfully implementing these changes while maintaining the highest standard of care for children entrusted to your nursery.

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