It has been revealed that £63.5m of childcare funding has been used to plug financial gaps in other areas of the education budget.

A report by the NDNA found that 74% of councils are redirecting these funds to alternative areas of their education budget – which were previously ear marked for childcare funding.

The published figures (under the Freedom of Information act) show that 95 councils across 130 local education authorities (LEAs) in England were guilty of “shortchanging children ad leaving providers out of pocket”. The NDNA suggests that the underspend total is likely to be higher as 21 councils did not respond to its FOI request.

The top 10 LEAs with the highest underspends were disclosed as:

  • Surrey – £5.15m
  • Birmingham – £2.67m
  • Hertfordshire – £2.5m
  • Norfolk – £2.27m
  • Islington – £1.99m
  • Sussex – £1.84m
  • Leeds – £1.82m
  • Essex – £1.8m
  • Lincolnshire – £1.71
  • Nottinghamshire – £1.67m

Within these councils’ underspend figures, almost half kept the money in their reserves, totalling £18.8m and 10 councils used the money to balance the books with overspending in their high needs block for children and young adults with SEND.

Chief Executive of NDNA Purnima Tanuku said; “Our analysis shows an alarming discrepancy in the way that early years funding for three- and four-year-olds is being used and how much is not reaching providers across the country. We have unravelled the true scale of the disastrous funding system which, if not addressed urgently by the Department for Education, will create a further crisis within early years.

“We know that council budgets are stretched to capacity, especially around High Needs and SEND support – but this robbing Peter to pay Paul approach is recklessly short-sighted. It damages the quality of care children and families receive.”

Read the full report here

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