Early Years and Childcare Special Newsletter
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Friday 16 January 2026
In December 2025, the Department for Education (DfE) published the new Dedicated Schools Grant local authority funding rates alongside the early years funding operational guidance for the next financial year (2026/27). These can both be accessed on the GOV.UK web page.
For 2026/27, local authorities are required to pass through a minimum of 97% of its main entitlement funding to early years providers, and publish local funding rates by no later than 28 February 2026.
In West Sussex the remaining 3% of 'Centrally Retained Funding' will be used for the administration of the scheme, including:
- making payments to providers
- support from the Early Years and Childcare Teams
- providing specialist services/projects to support disadvantage including children with Special Educational Needs and Disabilities
The following rates for 2026/27 have been approved:
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Funding stream
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Rate
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Increase from 2025/27 base rate
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3 and 4 year olds base rate
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£6.24 per hour
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an increase of £0.18
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2 year olds base rate
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£8.70 per hour
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an increase of £0.20
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9 months plus base rate
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£11.79 per hour
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an increase of £0.22
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Early Years Pupil Premium (EYPP)
(to a maximum of 15 hours per week per eligible child)
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£1.15
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an increase of £0.15
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Deprivation Supplement (Dep)
(to a maximum of 15 hours per week per eligible child)
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£0.65 per hour for eligible children
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an increase of £0.15 (this will give a combined EYPP/Dep increase to £1.80 per hour per eligible child)
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Disability Access Fund
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£975 per year for eligible children
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an increase of £37
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This means, that for those children who are eligible for EYPP/Dep, their hourly rates will be:
- 3 and 4 year olds - £8.04 per hour (base rate + EYPP/Dep)
- 2 year old base rate - £10.50 per hour (base rate + EYPP/Dep)
- 9 months plus - £13.59 (base rate + EYPP/Dep)
These revised rates will commence from the start of the summer term 2026.
The DfE have produced an easy explainer document which outlines how Early Years funding rates are calculated.
The indicative budgets for your setting will be shared with you by the end of this financial year. These will be made available to you via your secure log in on the Online Provider Portal.
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