Early Years Pupil Premium

Wednesday 25th June 2014 Written Statements

[The Minister for Schools (Mr David Laws)]

Today, we are publishing a consultation document setting out our proposals for the implementation of two key changes to early years funding in 2015-16: the introduction of the early years pupil premium for disadvantaged three and four-year-olds and moving to “participation funding” for disadvantaged two-year-olds.

Achievement at school is the strongest determinant of a child’s future earnings. Pupils who achieve five A* to C grades at GCSE earn on average 10% more than those who do not. However, the Sutton Trust have suggested there is a 19-month gap at the start of school between the most and least disadvantaged children. These gaps persist and widen throughout a child’s life. Research also shows that children from disadvantaged backgrounds can benefit the most from receiving a high-quality early education.

The New Early Years Pupil Premium

The aim of the early years pupil premium is to close the gap between children from disadvantaged backgrounds and their peers by providing funding to early years providers to help them raise the quality of their provision.

All children aged three and four are already entitled to 15 hours a week of funded early education, for 38 weeks of the year (570 hours/year). The early years pupil premium will complement that entitlement by providing nurseries, schools and other providers of Government-funded early education with an additional £300 a year for each eligible child accessing the full 570 hours with them. We estimate that over 170,000 children could benefit from the early years pupil premium in 2015-16.

Providers will be funded for the early years pupil premium along with their existing early education funding. We are also publishing today indicative local authority funding allocations for the premium.

The consultation document seeks views from professionals, parents and other interested parties on our proposals for the implementation of the early years pupil premium. We propose that—

(i) Those from low-income families, children in care or children adopted from care should be eligible for the early years pupil premium;

(ii) Providers are best placed to know how support their disadvantaged pupils with the early years pupil premium and so should have the freedom to decide how it is spent;

(iii) Ofsted will hold providers to account for how they have used the early years pupil premium to support their disadvantaged children through the regular inspection process.

Participation Funding for Early Learning for Two-Year-Olds

In September 2013 the entitlement to early education was extended to the 20% least advantaged two-year-olds, and from September 2014 it will be extended further to the 40% least advantaged two-year-olds. The early years pupil premium will close the gap at ages three and four between the additional support disadvantaged children get at age two through the new free entitlement and the additional support they get in school through the school-age pupil premium.

The consultation also covers moving funding of the free entitlement for two-year-olds onto a stable, long-term footing by introducing participation-based funding from 2015-16. This will mirror the way that the three and four-year-old entitlements are funded. This means that we will fund local authorities according to the actual numbers of eligible two-year-olds taking up a place. We recognise local authorities’ concern that we use the most up-to-date data to determine funding in the first year of participation-based funding. We are therefore proposing to use two data collections rather than one in 2015-16 to help us to do this.

The early years pupil premium and the two-year-old entitlement both only apply in England.