Local provider agreement and funded provider requirements

This is specific guidance for early years providers wishing to claim funds from Cambridgeshire County Council (CCC) for early education and care offered to children of pre-school age.

If you wish to claim early years funding from CCC, you must read and accept these conditions and confirm your acceptance by signing the early years funding agreement form, which will be sent to you via an 'E-Sign' agreement.

The provider must comply with all relevant legislation and insurance requirements.

1. Eligibility and information for parents

1.1 The provider is responsible for ensuring that all children meet the requirements for the funded entitlements appropriate to their age and that the parents/carers receive support in understanding their entitlement.

1.2 The provider should deliver the free entitlements consistently to all parents, whether in receipt of 15 or 30 hours and regardless of whether they opt to pay for optional services or consumables. Those children accessing the free entitlements should receive the same quality and access to provision as privately paying children.

1.3 Providers must:

Ensure that a ‘Parent/Carer Declaration Form’ is given to and completed by a parent/carer for every child for whom a provider is claiming a funded early years place.
Check original copies of documentation to confirm a child has reached the eligible age on initial registration for a funded place.
Check eligibility codes for working parents on the provider portal.

1.4 The ‘Parent/Carer Declaration Form’ may be retained on paper or digitally for council audits and any further investigations. If copy documentation is retained, this must be stored securely following data protection and privacy arrangements and removed when there is no longer a good reason to keep the data.

1.5 CCC has a responsibility to deliver an information service on childcare for families, in support of its duties to secure sufficient childcare and funded early years places for all who require them. CCC does this through the Families Information Service, Childcare and early learning, and the Cambridgeshire Online Childcare Directory.

1.6 Providers should:

Be clear and communicate to parents/carers details about the days and times that they offer free places, along with their services and charges.
Share information with the council and parents about the times and periods they can offer childcare places, including funded places.
Publish any formal admissions criteria on their website and in their prospectus.
Ensure parents understand which hours/sessions can be taken as free provision.
Work with parents to ensure that, as far as possible, the pattern of hours is convenient for parents wanting to work or train.
Ensure parents are aware of whether an early years funded place can be taken term time only or stretched across holiday periods, and which hours of the day are classed as funded.
Inform parents that they can take the remainder of their entitlement with any other registered provider if they are unable to offer the fully funded entitlements within a week or are open for less than 38 weeks of the year.
Consider the patterns of hours needed by parents in developing their business model.
Use the funding provided properly and follow any agreements reached with families and other professionals.
Encourage high levels of attendance for funded hours and support parents/carers to bring their children where attendance is lower.
Publish the cost of any chargeable extras on their website or in the Childcare Directory by January 2026, if they have more than 10 children attending their setting.

2. Financial Management

2.1 The provider will:

Maintain accurate financial and non-financial records, including an attendance register relating to early years funded places, and will provide CCC, on reasonable notice, with access to all financial and non-financial records for funding covered under this Local Agreement, subject to any confidentiality restrictions.
Make all relevant information available for funding audits carried out by the council. The council will carry out audits of financial and non-financial records relating to early years funding, and providers will be notified in advance when an audit is planned. As part of the audit, the provider must complete and return a short questionnaire designed to evidence their compliance with the funding terms and conditions.
Maintain a specific bank account in the name of the provision, company, charity or the person delivering the childcare (preferably a business account) for their provision with appropriate financial controls.
Retain records, either paper or electronic, regarding children for whom early years funding was claimed for a minimum period of six years after the child has left the provision.
Check the payment schedules from the council each funding period for errors and use them as notification for which of the children attending your provision are receiving Early Years Pupil Premium (EYPP) and/or the deprivation supplement. Notify the Early Years Funding team within four weeks of the end of the funding period of any inaccuracies.

3. Charging

3.1 Early Years Funding is intended to deliver 15 or 30 hours a week of free, high-quality, flexible childcare. The 15 or 30 hours must be able to be accessed free of charge to parents. There must not be any mandatory charges in relation to the funded hours. Early Years Funding is not intended to cover the costs of meals, other consumables, additional hours or additional services.

3.2 Providers can charge parents for the following extras in connection with the funded hours, but these charges must be voluntary for the parent:

Consumables to be used by the child, such as nappies or sun cream.
Meals and snacks consumed by the child.
Extra optional activities such as events, celebrations, specialist tuition, for example, music classes or foreign languages, or other activities that are not directly related or necessary for the effective delivery of the early years foundation stage (EYFS) statutory framework.

Providers can also charge parents for any additional, private paid hours according to their usual terms and conditions, provided that taking up private paid hours is not a condition of accessing a funded place.

3.3 CCC will ensure that providers follow these terms in levying any chargeable extras.

3.4 By January 2026, the costs of chargeable extras should be published on provider websites or, where they do not have a website, on the Family Information Service site. These should be clear, up-to-date and easily accessible to parents, to enable parents to make an informed choice of provider. Providers should set out the amounts charged for all the chargeable extras listed, as well as the pattern of hours that parents can take the entitlements. Providers may choose to follow the council template on how to set out these costs. Childminders and providers caring for 10 or fewer children at any one time are exempt from publishing chargeable extras.

3.5 By January 2026, invoices and receipts should be itemised and broken down separately into:

The funded entitlement hours.
Additional private paid hours.
Food charges.
Non-food consumables charges.
Activity charges.

This is to allow parents to see that they have received their child’s funded entitlement hours completely free of charge and understand that any fees paid are for additional hours or optional services. Invoices and receipts should include the provider’s full details so that they can be identified as coming from a specific provider.

3.6 Providers should be aware that participation in any optional extra activity should be based on parental choice and a willingness to meet the charges. Parents must be able to opt out of paying for chargeable extras and the associated consumables, or activities for their child. Children who do not participate in optional activities and extra services should continue to receive provision that complies with the EYFS.

3.7 Providers should be mindful of the impact of charges on families, particularly the most disadvantaged. Providers who choose to offer the free entitlements are responsible for setting a policy on providing parents with options for alternatives to additional charges. This policy must offer reasonable alternatives that allow parents to access the entitlement for free, including allowing parents to supply their own, or waiving the cost of these items.

3.8 Chargeable extras must not be a condition of taking up a funded place. All parents, including disadvantaged families, must have fair access to a funded place. The council will intervene if a provider seeks to make additional hours, optional services or optional consumables a mandatory condition of taking up a funded place.

3.9 Providers should deliver the funded entitlements consistently, so that all children within a setting accessing any of the funded entitlements receive the same quality and access to provision, regardless of whether they choose to pay for voluntary hours, voluntary extra services, meals or consumables. Those children accessing the free entitlements should receive the same quality and access to provision as privately paying children.

3.10 Providers must not charge parents for the following in connection with the entitlement hours:

Top-up fees (any difference between a provider’s normal charge to parents and the funding they receive from the local authority to deliver funded places).
The supply of or use of any materials, including, but not limited to, craft materials, crayons, paper, books, instruments, toys, or other equipment or learning resources that are necessary for the effective delivery of childcare.
Business running costs, including, but not limited to, rent, staff wages, cleaning materials, insurance, or utility bills such as energy, gas or water.
Registration fees as a condition of taking up a child’s funded entitlement place.
Non-refundable deposits as a condition of taking up a child’s funded entitlement place.
General charges, including but not limited to, non-itemised enrichment charges, sustainability charges, business continuity charges, additional charges, enhanced ratios, hourly rates, or any other supplementary charges on top of the funded hours.
Any additional fees that are not specifically identified and itemised as being for chargeable extras as described in 3.2.

3.11 Providers may charge parents a refundable deposit in relation to their entitlement hours. This must be paid back to parents within a reasonable period after taking up their place, but can be retained by the provider if the child does not take up their place with sufficient notice.

4. Invoicing

4.1 The provider must detail the total funded hours supplied to the child during the agreed invoice period, and the charge to the parent/carer for the funded hours (zero or nil) must be clear and transparent on the parent/carer invoice.

4.2 The parent/carer invoice/statement must also include an itemised breakdown of any additional charges, for example, meals, snacks, nappies, other consumables, specialist activities, trips, or any other services that the parent/carer has taken.

4.3 The parent/carer should be able to see clearly how the funded hours have been applied/illustrated as claimed by the provider, and the council should easily be able to match its payments and any parental payments to an invoice period in an appeal situation or through an audit.

4.4 The funded entitlement hours cannot be compressed, for example, a parent/carer cannot take more than 15 or 30 hours per week over fewer than 38 weeks of the year. However, a parent/carer can choose a provider that is open for fewer than 38 weeks of the year and therefore can receive 15 or 30 hours a week for fewer weeks. The invoice must apply to all the hours that have been taken.

4.5 Funded entitlement hours can be stretched by taking fewer hours a week over more weeks, based on the provider’s opening hours and/or parental demand. For example, a child entitled to 570 hours per year could attend just under 12 hours a week for 48 weeks of the year, or around 23 hours a week for 48 weeks for a child entitled to 1140 hours per year.

5. Making funding claims (administration)

5.1 The provider must register to use the online Provider Portal to submit claims within the times and funding periods requested by the Early Years Funding Team. Portal usernames are issued one per person and must not be shared with colleagues. When a user leaves a provider, the Early Years Funding team should be notified as soon as possible so a new user can be issued.

5.2 The government determines the overall funding available to the council to fund their providers for early years places, with some local discretion in determining funding rates. All new providers will be informed of all the applicable funding rates when they join the scheme. Existing providers will be informed of the funding rates to be paid at the beginning of each financial year.

5.3 The council will clearly set out documentation that is needed from providers to support payment and delivery of the funded entitlements and the timetable that providers should follow when submitting their documentation, including setting out the importance of timely and accurate census returns. This information can be found on the Early years funding CCC webpage.

5.4 The provider must ensure they submit timely and accurate information, including but not limited to funding claims, census, and sufficiency data.

5.5 The provider is solely responsible for submitting the correct and accurate details of children and claiming funded hours, in line with the deadlines set out by the Early Years Funding Team. Failure to do so will result in not being paid on time.

5.6 Providers must also complete the Schools Census or Early Years Census as applicable. The applicable census must be completed in full and as requested by the council in line with the published timescales. The completion and return of the census are a legal requirement.

6. Temporary or permanent closure

6.1 The provider must inform the Early Years Funding Team and Families Information Service as soon as is reasonably practicable if it is closing on a temporary or permanent basis, to ensure that payments can cease as appropriate, any adjustments can be made, and the need for repayments can be avoided.

Full details of how funding is administered locally and what providers need to do are contained in the 'Guide to Administration 2025-26' on the Early years funding CCC webpage.

7. Compliance (ensuring funded claims are valid)

7.1 The provider is responsible for ensuring that all children meet the requirements for any of the entitlements appropriate to their age. The provider must

Ensure all relevant staff who deal with applications for places are fully aware of the conditions of this agreement, and that all staff are aware of the early years funding offer that is available to parents/carers.
Ensure all children are eligible (by age) for a funded place and that all parents/carers understand and can access the council’s Privacy notice.
Check with the parent/carer that the child does not receive all or part of the funded entitlement at another provider.
Ensure they submit timely and accurate information, including, but not limited to, headcount data, census data, parental declarations and invoices, and sufficiency data, as per the published administrative guidance for providers. Failure to do so may result in inaccurate, delayed or suspended funding.
Check original copies of documentation to confirm a child has reached the relevant age on initial registration for all funded entitlements. The provider can retain paper or digital copies of documentation to enable the council to carry out audits and fraud investigations. Where a provider retains a copy of documentation, this must be stored securely and deleted when there is no longer a good reason to keep the data. Please refer to the data privacy guidance set out in the Cambridgeshire Parent Declaration.
Ensure that where children are eligible for both the disadvantaged two-year-old (funded twos) entitlement and the working parent entitlement that childcare is provided under the disadvantaged two-year-old entitlement.
Ensure that from September 2025, where households meet the eligibility criteria for both two-year-old entitlements that the first 15 hours are recorded as the disadvantaged two-year-old entitlement and up to fifteen additional hours are recorded as working parent entitlement, working with other providers the child attends, where necessary to agree how the claim is accurately recorded.
Verify eligibility for all places before any funding can commence.
A written consent form is to be completed to be able to receive confirmation and future notification from the council of the validity of the parent’s extended/expanded entitlement eligibility code and entitlement to other Education Welfare Benefits.
Verify the validity of the extended/expanded local entitlement eligibility code before offering a place to the parent.
Follow and fully understand the eligibility requirements set out for the extended/expanded entitlement.

7.2 Where extended absences occur for medical reasons, appropriate support should be given to the family depending on its needs. Keeping a place open may smooth the way for a phased return, and the best approach should be agreed upon with the parent/carer and any professional who may be working with the family. Extended absences to visit family can be included as part of a claim, for up to a maximum of one month. If a child has been absent for four weeks within the same funding period, the Provider must contact the Early Years Funding Team.

7.3 Providers acknowledge that the definitions of childcare and early years provision, under sections 18 and 20 of the Childcare Act 2016, specifically exclude a child’s relatives from claiming the funding entitlement. Childminders cannot claim for children who are related, and this includes when a registered childminder is providing foster care for a child. Claiming in such circumstances may be considered fraudulent, and all monies would be reclaimed by the council. The Childcare Act 2016 defines a relative as a grandparent, aunt, uncle, brother, or sister, whether of the full blood or half blood or by marriage or civil partnership.

7.4 The council will not charge providers disproportionate penalties for providing late or incomplete information, leading to additional administration in the processing of funded entitlements. Any charges will be reasonable and proportionate to the inconvenience or costs incurred by the council as a result of the lateness, and the council will ensure charges are clearly communicated to providers.

7.5 Providers must ensure that:

Fundamental British values are actively promoted, and
Evidence-based views or theories are not promoted where contrary to established scientific or historical evidence and explanations.
Any measures identified in a report from Ofsted to improve the overall effectiveness of the provision, or the effective administration of these arrangements, are fully met.

8. Flexibility

8.1 Provision must be offered within the national parameters on flexibility as set out in Section A2 of Early Education and Childcare Statutory guidance for Local Authorities.

8.2 The provider should:

Work with the local authority and share information about the times and periods at which they can offer free entitlements to support the local authority to secure sufficient, stretched and flexible places to meet parental demand in the local authority.
Make information about their offer and admissions criteria available to parents at the point the child first accesses the provision at their setting.
Make parents aware that they can take up the rest of their entitlement with another provider where the provider is open for less than 38 weeks of the year.

8.3 Parents/carers can choose to split funded hours with a council-maintained school, nursery/academy nursery and any other provider that is not the council or school/academy controlled. Parents can split their entitlement between multiple providers, though no more than two sites in one day.

8.4 A stretched offer is at the discretion of the provider. Children starting at a provider partway through a term should be offered a funded place based on a pro rata of the remaining available hours left in the term.

8.5 The provider acknowledges that parents may make claims for EYF places from more than one provider, but there must not be provision across more than two sites in one day. This is to allow parents flexibility to use wraparound provision for short periods to meet their working needs. The minimum time which can be claimed by a provider in Cambridgeshire will be 30 minutes. The Parent/Carer Declaration has space for the parent to give the name of the other provider/s and the claim/s being made there.

8.6 Providers should ensure children are 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, a provider should not offer 10 am to midday and 1 pm to 3 pm as entitlement hours and offer only private paid hours in between.

8.7 Providers should offer flexible packages of funded hours, subject to the following standards, which will enable children to access regular, high-quality provision, whilst maximising flexibility for parents and ensuring a degree of stability for providers:

No session to be longer than 10 hours.
No minimum session length (subject to the requirements of registration on the Ofsted Early Years Register).
Not before 6 am or after 8 pm.
A maximum of two sites in a single day

8.8 Funded places can be delivered:

Up to 52 weeks of the year if the parent is stretching their child’s entitlement (see 3.20).
Outside of the maintained school term times.
At weekends

8.9 There is no requirement that funded places must be taken on or delivered on particular days of the week or at particular times of the day, subject to the standards set out in 8.7.

8.10 There is no requirement that providers must be open for at least 38 weeks of the year or that providers must offer all the funded entitlements to receive funding to deliver funded places.

8.11 Funded entitlement hours cannot be compressed. This means that a parent cannot take more than 15 or 30 hours per week over fewer than 38 weeks of the year. However, a parent can choose a provider that is open for fewer than 38 weeks of the year and therefore receive 15 or 30 hours a week for fewer weeks.

8.12 Funded entitlement hours can be stretched by taking fewer hours a week over more weeks of the year, for example, just under 12 hours a week for 48 weeks of the year where the child is entitled to a total of 570 hours per year or around 23 hours a week for 48 weeks of the year where the child is entitled to a total of 1140 hours per year. Providers should set out how many funded hours parents are getting per day and week, to ensure parents understand what funded hours they are receiving over the calendar year from when their child first becomes eligible.

9. Audit

9.1 The provider must collaborate with the council to enable the council to carry out checks and/or audits on providers to ensure compliance with the requirements of delivering the funded entitlements. This will usually occur as part of a rolling timetable and will not usually occur more than once every three years, unless there has been a parental complaint or evidence of serious non-compliance, in which case an additional audit may be completed. This will ensure that the provider is using public funds paid to them appropriately and lawfully, following the terms of this agreement, whilst minimising the burden to providers.

9.2 The provider must provide documentation upon reasonable request, including, but not limited to, funding offer, fees, chargeable extras, parent/carer declaration forms, invoices, attendance registers, and a short questionnaire designed to allow the provider to evidence and reconfirm their compliance with the funding terms and conditions. The provider must allow representatives of the council to visit the premises at all reasonable times and make available requested records.

9.3 The council will provide an opportunity for the provider to discuss any matters arising, clarify any points regarding its funding, and for the council to help the provider comply with this agreement and, where any changes to practice need to be made, provide actions to be completed within a given timeframe.

9.4 The provider will reimburse the council upon demand where any over-payments of funding have been made.

9.5 Where the provider has knowingly or negligently submitted fraudulent claims and received payment, the council may terminate this agreement with immediate effect and will report the provider to the appropriate authorities.

10. Complaints process

10.1 When a parent believes that their chosen Provider has not acted following the provisions of this agreement, legislation, and/or published statutory guidance following the legislation, they should first discuss this directly with the provider.

10.2 The provider should ensure they have a complaints procedure in place that is published and accessible for parents who are not satisfied their child has correctly received their funded entitlement, as set out in this agreement and early years and childcare statutory guidance for local authorities.

10.3 Where any parent makes a complaint to the council, it will investigate in line with its feedback policy for compliments, complaints and suggestions, and may undertake a full audit which could include a provider visit as set out in Part 2 above.

10.4 If a parent or provider is not satisfied with the way in which their complaint has been dealt with by the council, or believes the council has acted unreasonably, they can make a complaint to the Local Authority Ombudsman. Such complaints will only be considered when the local complaints procedures have been exhausted.

11. Termination and withdrawal of funding

11.1 Suspension of registration by Ofsted, or a childminder agency, or a breach of statutory requirement, or safeguarding issues, may result in the termination of the arrangement and withdrawal of funding.

11.2 Where the council has investigated procedures outlined in Part 2 above and has identified that the provider has not adhered to the provisions of this agreement or complied with legislation and published statutory guidance, the council may terminate this agreement forthwith with immediate effect and withdraw funding.

11.3 The council may terminate this agreement forthwith and withdraw funding by serving notice in writing upon the provider as required by Regulation 7 (Termination of the arrangements) of the Local Authority (Discharge of Duty to Secure Early Years Provision Free of Charge) Regulations 2014* and Regulation 37 (Arrangements between local authorities and early years Providers: termination) of The Childcare (Early Years Provision Free of Charge) (Extended Entitlement) Regulations 2016.

*Size: 90.9KB File format: PDF.

11.4 Where the provider wishes to withdraw from offering early years funded places, it may terminate this agreement by serving written notice of at least 28 days upon the council.

12. Appeals process

12.1 The provider may be denied approval to offer the funded entitlements or have their funding withdrawn as set out in clause 3.2 above. The provider can appeal against that decision

12.2 If an appeal arises out of or in connection with this agreement or the performance, validity, or enforceability of it (appeal), then the parties shall follow the procedure set out in this clause.

12.3 Either party shall give to the other written notice of the appeal, setting out its nature and full particulars (Appeal Notice), together with relevant supporting documents. On service of the appeal notice, the authorised representatives (Early Years Funding Team) shall attempt in good faith to resolve the appeal.

12.4 If the authorised representatives fail to resolve the appeal within 14 days of service of an appeal notice, then either party, by notice in writing to the other, may refer the appeal to the Head of the Cambridgeshire Early Years, Childcare, and School Readiness Service (CambsEYC) who shall act in good faith to resolve the appeal as amicably as possible within 14 days of service of such notice.

12.5 If the Head of CambsEYC fails to resolve the appeal in the allotted time, then the appeal procedure shall be deemed exhausted.

12.6 Recourse to this appeal procedure shall be binding on the parties.

Accordingly, all negotiations connected with the appeal shall be conducted in strict confidence and without prejudice to the rights of the parties in any future legal proceedings. Except for any party's right to seek interlocutory relief in the courts, no party may commence other legal proceedings under the jurisdiction of the courts or any other form of arbitration until 21 days after the parties have failed to reach a binding settlement by mediation (at which point the appeal procedure shall be deemed to be exhausted).

12.7 If, with the assistance of a mediator, the parties settle, such settlement shall be reduced to writing and, once signed by the duly authorised representative of each of the parties, shall remain to bind on the parties.

12.8 The parties shall bear the legal costs of this appeal procedure, but the costs and expenses of mediation shall be borne by the parties equally.

12.9 While the appeal procedure referred to in this clause six is in progress and any party must make a payment to another party or allow a credit in respect of such payment, the sum relating to the matter in appeal shall be paid into an interest-bearing deposit account to be held in the names of the relevant parties at a clearing bank and such payment shall be a good discharge of the parties' payment obligations under this agreement. Following the resolution of the appeal, whether by mediation or legal proceedings, the sum held in such account shall be payable as determined following the mediation or legal proceedings, and the interest accrued shall be allocated between the parties pro rata according to the split of the principal sum as between the parties.

13. Legislation and statutory guidance

13.1 The following frameworks and legislation underpin this Local Agreement, and the council and the provider shall comply with such frameworks and legislation and all other applicable legislation:

Early Years Foundation Stage 2024.
Early Education and Childcare Statutory Guidance for Local Authorities, January 2024, especially Part A.
Childcare Act 2006.
Childcare Act 2016.
Equality Act 2010.
School Admissions Code 2014.
Data Protection Act 2018 and all relevant Data Protection Legislation.