Useful statutory guidance for administering Early Years Funding entitlements, universal, extended, expanded, and funded twos, and a sample template for invoicing.
Early education and childcare - GOV.UK
Key points for admissions
Providers should ensure their admissions information is clear, transparent, and accessible to parents.
Private, voluntary, and independent providers can set their criteria for the admission of children, provided they comply with relevant equality and non-discriminatory legislation.
All parents should have fair access to a funded entitlement place, regardless of whether they opt to pay for additional private paid hours, food, non-food consumables, and extra optional activities.
Providers should publish any chargeable extras for meals/snacks, non-food consumables, additional private paid hours, and additional services and make these easily available to parents to enable parents to make an informed choice of provider. This should be available when a parent first takes up their child’s funded place.
Providers should ensure they are completely clear and transparent about which hours/sessions can be taken as funded provision, and this should be consistent for all parents taking up funded hours. As far as possible, the pattern of hours should be convenient for parents’ working hours.
Providers should ensure that all parents have fair access to a funded place, which must be delivered completely free of charge.
Key points for charges
Government funding is not intended to cover the costs of meals, other consumables, additional hours, or additional services.
Providers can charge for meals and snacks as part of a funded entitlement place, and they can also charge for non-food consumables, such as nappies or sun cream, and additional services such as trips and specialist tuition.
Providers who choose to offer the funded entitlements are responsible for setting their policy on providing parents with options for alternatives to additional charges, including allowing parents to supply their own or waiving the cost of these items.
Key points for invoicing
When invoicing, please promote tax-free childcare and universal credit as ways parents can pay the invoice.
Tax-Free Childcare
Parents can get up to £500 every three months, up to £2,000 a year, for each child under 11 to help with childcare costs. This goes up to £1,000 every three months if a child is disabled, up to £4,000 a year. Parents set up an online childcare account for each child, and for every £8 paid into the account, the government pays in £2 to use to pay providers. Parents can get Tax-Free Childcare at the same time as 15 or 30 hours, if eligible, of Early Years Funding. Further information for parents can be found at Tax-Free Childcare - GOV.UK
Providers can set up an account to receive Tax-Free Childcare via Sign up to Tax-Free Childcare if you’re a childcare provider - GOV.UK
Universal Credit
Parents can get up to 85% of childcare costs paid back to them if they are in receipt of certain benefits and are in paid work or starting a job in the next month. Parents normally need to pay for the childcare first, but might be able to get help if they cannot afford to pay the upfront cost. Further information is available at Universal Credit childcare costs - GOV.UK
Sample invoice
A sample compliant invoice* is available on the Early Years Funding webpage.
*Size: 156 KB File format: pdf
Funded entitlements
Universal funding entitlement for three- and four-year-olds is up to 15 hours per week, 570 hours per year.
Extended funding entitlement for three- and four-year-olds is an additional 15 hours for working parents, increasing the total to up to 30 hours per week, 1,140 hours per year, where eligible.
Funded twos' entitlement for two-year-olds receiving some additional forms of government support, or currently or previously in local authority care, is up to 15 hours per week, 570 hours per year.
Expanded funding entitlement for children aged from nine months from working families is up to 15 hours per week, 570 hours per year, where eligible. From September 2025, this increases to 30 hours per week, 1,140 hours per year, where eligible.
Oversubscription
Where more applications for funded entitlement places are received than places are available, places should be allocated following oversubscription criteria. Providers must clearly state oversubscription criteria and ensure it is fair, clear, and transparent.
Lunch
Children should be able to take up their funded hours in continuous blocks if they wish to, and there should be no artificial breaks in the entitlement hours. For example, the lunch hour/session should form part of the funded provision where the child is attending a morning and afternoon session.
Providers can charge for meals and snacks, provided this is not a condition of accessing their child’s funded place. Providers must set their policy on providing parents with options for alternatives, including allowing parents to supply their meals and snacks or waiving the cost of these items.
Written agreements
A parental declaration form is an agreement between parents and their chosen provider or providers. It should set out the hours and patterns of access to the funded entitlement that the parent and provider have agreed to.
This form is retained by and is the property of the provider and should be used to support the clarity of the agreement between the parent and provider. Cambridgeshire County Council may ask to see the form as part of their reviews of funding claims.
All Cambridgeshire settings must use the Parent carer declaration 2025 - 2026* form to record their agreement with parents to claim funded hours. Claims submitted on the provider portal during an actual claim task must match the funding period as recorded on the parent carer declaration.
*Size: 276 KB File format: pdf
If providers are not recording additional paid services on their parent carer declaration, providers should have a separate agreement for those parents who opt into or opt out of paying for additional private paid hours, meals/snacks, non-food consumables, and additional services.
Deposits
Providers can charge a refundable deposit to parents accessing funded entitlements. The purpose of the deposit is to give providers certainty that a parent will take up the place. A reasonable timescale should be determined and communicated to parents for refunding the deposit once the child starts the setting.
Registration fee
Providers must not require parents to pay a registration fee as a condition of taking up their child’s funded place.
'Top-up' fees
Providers must not charge parents top-up fees – any difference between a provider’s normal charge to parents and the funding received from Cambridgeshire County Council to deliver funded places.
