Funding handbook for Coventry Childcare Providers: Early Education Entitlement Funding - Print version

This guidance has been created by Coventry’s Business, Sufficiency and Funding Team to support childcare providers in meeting the terms and conditions of Early Education Entitlement Funding delivery, as set out in the following Government and Local Authority documentation:

• Early education and childcare: Statutory guidance for local authorities
• Early years entitlements: operational guidance: For local authorities and providers
• Coventry Annual Provider Funding Agreement

Please note the following:

• throughout this document we will use the term ‘provider’ when referring to ‘an Ofsted registered childcare provider who has entered into an agreement with Coventry City Council to deliver any or all of the government funding entitlement places.
• the term parent is used throughout this guidance to refer to the person who has parental responsibility for a child.

Admissions policy

All parents should have the same rights to access a funded entitlement place regardless of whether they choose to pay for additional hours, food consumables, non-food consumables and activities.

Providers should publish admissions information, which is clear and can be easily understood by parents. This is to support parents to make an informed decision about where they wish to use their child’s funded entitlement.

The admissions information should clearly identify which hours/sessions can be taken as funded provision.

Termly headcount

All children in receipt of early education entitlement funding must be registered and attending, no later than the termly headcount date. These dates are included on the early years Funded Week and Payment Schedule which is published on the Council website.

There are some occasions when the local authority will authorise a child to begin a funded place after the termly headcount has closed. To see if the child meets the criteria for funding via the exceptional circumstances route, providers should visit the Early Years Website [https://www.coventry.gov.uk/early-years-childcare/early-years-pvi-providers-2-3-4-year-old-early-education-funding/6] pages.

Operational models of delivery

Providers should deliver flexible packages of childcare, which support families to take up funded places within the parameters set out in the statutory documents.

Funded places should be free at the point of delivery; no mandatory charges should be attached to any hours during which funding is being delivered. For children accessing funded hours before and after lunch, the lunchtime period should form part of the funded hours offer and must not be charged as a ‘privately paid for’ hour

For example, for a child taking up 30 hours, over 5 days per week: 8:30am  to 2:30pm; you may offer parents the option of ‘purchasing’ additional hours around the funding block, although this must be optional.

Government requirements stipulate that children should be able to take up their funded place in continuous blocks of time.

To enable parents to make an informed decision about where their child takes up a funded place, providers should publish information about how and when they deliver funded places.

The Department for Education expect this information to be published on the provider website or Coventry Family Information Directory by January 2026. This requirement is applicable to all provisions that have 10 or more children in attendance at any one time. Information should include but not be limited to:

• days and times of funded sessions 
• the times and costs of any additional ‘privately paid for’ hours
• any additional charges, which are not covered by the funded entitlement, must be offered to parents as a voluntary purchase option. This may include but not be limited to food consumables, non-food consumables such as sun cream or nappies, activity charges and additional hours
• where the provider asks parents to pay for additional hours and services, they must have a policy/statement which sets out alternative options for parents who choose to opt out of ‘voluntary charges’, items and or services. For example, allowing the parent to supply their own items

Examples of models offering both funded and privately paid for hours

Table 1

Table 1 assumes that the child is eligible to receive 15 hours funding per week. The child attends a funded morning session, and the parent is opting to pay for additional periods and services which fall outside of the funded hours, for example, 7.30am to the start of the funded hours.

Table 2

Model 2 assumes that the child is eligible to receive 30 hours funding per week. This child attends all day and accesses funded hours between 8:30am to 2:30pm. The parent is opting to pay for additional hours and services which fall outside of the funded hours.

Charging policy

Registration Fees

Providers are not permitted to ask parents to pay a Registration and/or Administration fee in connection with government funded hours.

Deposit

Providers may ask parents to pay a ‘refundable’ deposit, to secure a child’s funded place. This deposit must be refunded to the parent, by the end of the first term in which the provider receives the remittance payment of government funding for the named child, from Coventry City Council.

Providers will not be required to refund the deposit where;

• a parent has secured a place at the setting, but the child does not start at the setting before the termly headcount date
• the child has been attending the provision but moves to a new provider/school after the start of a new funding term, but before the termly headcount date

Charging policy

The provider’s policy for optional charges must be published on their website or Coventry Family Information Directory no later than January 2026. This is applicable to all provisions that have 10 or more children in attendance at any one time. The charging policy must identify any charges made for:

• cost of additional ‘privately paid for’ hours
• food consumables
• non-food consumables, and
• activities

This policy should include a breakdown of what is included within each charge and highlight what happens in circumstances where the provision is closed, the child is absent, or the child relocates to another setting.

The policy will need to provide parents with options for alternatives to additional charges, such as allowing parents to supply their own, or waiving the cost of these items. Please note where parents have opted out of additional payment for activities, children must continue to receive provision that complies with the EYFS.

Although charges for additional items and services must be optional for parents, in order to support business sustainability, providers are able to ask parents to agree these on a term-by-term basis, in advance of the forthcoming term.

Written agreements with parents should include a section to show whether individual parents have opted in or out, of specific additional items/ services and for how long e.g. termly. Coventry’s Early Years Annual Parent Funding Agreement may be used for this purpose

Fee and charging information

Providers should be transparent about their fee information, billing approach, frequency and payment methods. For example, whether invoices will be issued weekly, monthly or termly and whether tax-free childcare and other voucher schemes and/or discounts can be used if applicable.

Invoices will not be required where parents access funded hours only and do not opt in to purchase any additional extra items or services.

Checklists

Fee information checklist for childcare provider delivering early education entitlement funding

Does the fee information:

• include the name, address, telephone, and email contact details of the provision?
• state opening hours?
• make clear to parents that funded entitlement hours are completely free of charge during specified hours/sessions/days?
• tell parents which times and days funded hours will be delivered?
• tell parents about the maximum number of funded weeks/hours in each term and academic year, and which weeks/dates are covered in each funding period?
• highlight to parents that all children in receipt of funding must have taken up a place before the termly headcount date?
• make clear to parents, the policy the provision will follow, where parents choose to relocate their child to a new provision/school, following the submission of termly headcount data to Coventry City Council?
• highlight to parents who are in receipt of a 30-hour funded place, that they must re-confirm their eligibility every 3 months, as prompted by HMRC and the consequences, should the parent fail to do so?
• include charges for ‘privately paid for’ hours?
• set out contractual expectations relating to ‘privately paid hours and optional items and services?
• clearly outline eligibility requirements for each of the funding entitlements offered and tell parents how they can apply?
• highlight to parents that the provision of items and services, including food consumables, non-food consumables, activities and additional hours will be offered as an optional extra which parents may purchase? Costs for each item and/or service should be stated, for example:
  • additional hours £?
  • food charges £?
  • non-food consumables charges £?
  • and activities charges £?
• a comprehensive breakdown of all items and services that are covered by the optional extras policy, under each of the following headings:
  • food charges e.g. snacks, breakfast, lunch and tea
  • non-food consumables charges e.g. nappies and sun cream
  • activities charges e.g. weekly gym tots session
• highlight to parents the policy you will follow on how you will respond if parents choose to opt out of the additional charges?
• state the terms, conditions and costs incurred for late collection?
• enable parents to easily reconcile fee information against their invoice, so that they can clearly identify what they have been charged for and why? Headings must include but may not be limited to:
  • the number of free entitlements hours
  • the number and cost of additional privately paid hours
  • food consumable charges
  • non-food consumables charges
  • activities charges
• state how parents can apply for and use a Tax-Free childcare account?
• inform parents about additional funding payments such as Early Years Pupil Premium (EYPP) and Disability Access Funding (DAF)?

Early Years Pupil Premium (EYPP)

Early years providers can claim (EYPP) for eligible children who are in receipt of early education funding. Funding provided through EYPP is intended for use enhancing the environment, purchasing additional resources or staff training. The payment covers the first 15 hours of each eligible child’s entitlement. The hourly rate for EYPP is subject to annual change and can be found on the Early Years website in a document called ‘Funded Weeks and Payment Schedule’.

Making a claim for EYPP

• Providers must use the Coventry Schools and Early Years Portal to make and validate EYPP claims
• parents must complete the relevant section of the Coventry Early Years Annual Parent Funding Agreement, prior to any information being uploaded to Coventry Schools and Early Years Portal

Disability Access Funding (DAF)

• DAF is an additional annual payment made to providers for eligible children who are accessing a funded place and are also in receipt of Disability Living Allowance (DLA)
• the funding provided through DAF is intended for use in supporting the provision to make reasonable adjustments, which help to remove barriers to attendance for children with SEND

Making a claim for DAF:

• claims must be made via the Coventry Schools and Early Years Portal. Parents will need to provide evidence that their child is in receipt of DLA. This evidence will need to be uploaded to the portal
• parents must complete the relevant section of the Coventry Early Years Annual Parent Funding Agreement, prior to any information being uploaded to Coventry Schools and Early Years Portal

Invoices and receipts

Providers should ensure they have clear invoice/receipt structures in place which enable parents to easily reconcile invoices with charges detailed on the provider’s fee information. Invoices should be fully itemised to show a break-down of all aspects of the fee including funded hours, additional ‘paid for' hours, services, meals and snacks.

• the number of free entitlements hours
• the number and cost of additional privately paid for hours
• food consumable charges
• non-food consumables charges
• activity charges

Please note, funded hours must not be presented as a monetary value and therefore must be shown as zero cost. This is to ensure that parents can see that their children have received funded hours completely free of charge at the point of delivery.

Many providers now choose to bill parents in equal monthly amounts, known as an annualised format; this creates convenience and certainty for both providers and parents in terms of cash-flow. It does however create a couple of infrequent complications which providers must make clear and communicate to affected parents:

• if a child does not take up a funded place until part-way through the year, parents need to be made aware that any additional, optional charges covering the remainder of the academic year will be spread across fewer monthly payments. This may mean higher payments for these months to cover childcare costs during holiday periods, where a provider operates 51 weeks of the year
• if a child leaves the childcare place part-way through a year, the parents may have been paying a higher monthly fee to cover holiday periods which they would then not access. Providers would be required to re-calculate the costs incurred for that year to ensure that affected parents have not been overcharged, and to reimburse parents where they have overpaid

Invoices will not be required where parents access funded hours only and do not pay for any additional hours, items or services.

Checklist for invoices and receipts

Is the following information clearly detailed on the invoice/receipt issued to parents?

• Provider name
• Provider address
• Provider contact
• Invoice number
• Invoice date
• Provider telephone number and/or email
• Parent name and contact details
• Child’s name

Itemised pricing information which is clearly reconcilable with the information you have provided on the fee information

• the total number of funded hours and weeks allocated for the term
• the total number of hours contracted to attend in this invoice period (Both privately paid for and funded hours)
• the total number of funded hours claimed.
• these must be shown as hours and are not represented as a monetary value. E.g. 60 funded entitlement hours = £0.00
• additionally purchased ‘privately paid for’ hours are clearly itemised E.g. 10 hours @ £? (School rate)
• food charges
• non-food charges consumable charges
• activity charges

Early Education Funding Delivery - Compliant Invoice Examples

Please see examples of invoices [https://www.coventry.gov.uk/downloads/download/7304/early-education-funding-delivery---compliant-invoice-examples-providers] that would be considered compliant with government and Coventry City Council requirements, Providers should use these examples to ensure compliance against the requirements. We have included annualised invoice examples, which are used by some providers. Annualised invoice calculations are used to spread the total cost of provision over a set number of months, up to a maximum of 12. Where the examples refer to non-annualised invoices, this is where the provider calculates the charge based on hours attended in the invoice period.
Please note that all invoice examples have been set to refer to the month of April which has fewer funded days than a typical month.