Childcare Funding in England Explained

In the UK the central government provides funding for eligible children to assist with the cost of childcare, which is paid to childcare providers via local authorities.

The number of funded hours a child is entitled to depends on their age and their family's circumstances. Nurseries claim these hours on behalf of the children in their care at the start of each term, through a process called a headcount submission.

All three and four year olds in England are entitled to 15 hours of funded childcare per week during term time. This is the universal entitlement, sometimes referred to as the universal 15 hours.

For three and four-year-olds, eligible working parents can access an additional 15 hours on top of the universal entitlement, giving a total of 30 hours per week. For younger children, from nine months old, eligible working parents are now entitled to the full 30 hours per week of funded childcare, without a separate universal entitlement baseline.

Funded childcare hours in England can be delivered in two ways:

• Term-time only: the full weekly entitlement is taken across the approximately 38 weeks of the school term. A child on 15 funded hours would receive 15 hours per week during term time and nothing in the holidays.
• Stretched (all year round): the same total annual hours are spread across more weeks, for example 51 weeks, resulting in fewer funded hours per week but a more consistent pattern across the year.

The total amount of funding a nursery claims is the same either way. However, the weekly calculation is different, which is why nurseries need to know which arrangement each child is on.

Funding Loop automatically calculates the correct funding for each child based on their attendance pattern and whether they are on a term-time or stretched arrangement, removing a common source of errors at submission time.

A headcount submission (sometimes called an actuals submission) is the process by which nurseries formally notify their local authority of how many funded children they have each term and how many hours each child is claiming.

The local authority uses this information to calculate and pay the nursery's funding for the term. Submissions are made through the local authority's online portal, and deadlines are set each term.

Errors or missing information in headcount submissions are a common cause of funding delays and underpayments. Common issues include mismatched child names or dates of birth, expired eligibility codes, and attendance patterns that do not match what was agreed with parents.

Funding Loop automates the headcount submission process by providing a browser plugin tool. You can use this to automatically type claim data directly into your local authority portal. Once complete, it will flag any discrepancies before they cause delays.

A Parental Declaration form is a document that parents or carers must complete to confirm their child's eligibility for government-funded childcare hours in England.

It captures key information including:

• The child's personal details and date of birth
• The number of funded hours being claimed and the attendance pattern
• Whether the child attends any other settings and how hours are split
• The parent's working parent eligibility code, where applicable
• The parent's confirmation that the details are correct

Nurseries are required to hold a completed, signed Parental Declaration form for every child they claim funded hours for. Incomplete or inaccurate forms can result in funding being delayed, reduced, or rejected by the local authority.

Funding Loop digitises and automates the entire Parental Declaration process — sending forms to parents by email, pre-populating the majority of the details, and allowing parents to sign electronically and upload documents as photos.

Funding rules require nurseries to confirm a child's eligibility and attendance pattern each term by submitting a headcount claim, because both can change. A child's hours might increase as they get older, their attendance pattern might change, or their parent's working parent eligibility might need reconfirming.

In practice, when nothing significant has changed, many of the form's details can be carried forward from the previous term. Some local authorities allow forms to be rolled over without a new parent signature if the funding details are unchanged.

If a Parental Declaration form is not completed and returned before the submission deadline, the nursery cannot include that child in their headcount submission. This means the nursery will not receive funding for that child for the term.

Chasing parents for completed forms is one of the most time-consuming parts of nursery funding admin. Sending clear, timely reminders and making the form as easy as possible to complete significantly improves return rates.

Funding Loop provides a real-time dashboard showing which parents have and have not completed their forms, with one-click reminders to chase outstanding submissions.

A Working Parent eligibility code (often called a 30-hours code) is a unique reference number issued by HMRC to parents in England who meet the eligibility criteria for extended funded hours.

Parents must apply for the code through the government's Childcare Service and reconfirm their eligibility every three months. If a code is not reconfirmed, it expires and the nursery cannot claim the extended hours for that child until the code is renewed by the parent.

If a parent's code expires before the nursery submits its headcount, the local authority portal will typically reject the extended hours claim for that child. The nursery will not receive the additional funding until a valid code is provided and, depending on the local authority's rules, may not be able to backdate the claim.

This is why checking codes well before the submission deadline matters. Nurseries that check codes early in the term give parents time to reconfirm eligibility without disrupting the funding claim.

Codes are checked through the local authority's headcount portal. Most portals require nurseries to enter each code individually and run a check, a time-consuming process when a nursery has many children using Working Parent Entitlement hours.

Funding Loop allows nurseries to check all Working Parent eligibility codes in bulk at the start of term, rather than one by one, giving parents time to reconfirm before the submission deadline.

EYPP stands for Early Years Pupil Premium. It is additional funding paid to nurseries and childcare providers in England for eligible children, designed to help settings support children from disadvantaged backgrounds.

The EYPP supplement is paid on top of standard funded hours and is separate from any pupil premium funding received by schools.

A child is eligible for EYPP if their family meets certain criteria, which typically include:

• The parent / guardian is in receipt of Universal Credit
• The child is or has been looked after by the Local Authority
• The parent / guardian is an asylum seeker receiving support under Part Six of the Immigration and Asylum Act 1999

Please see the official guidance for more details: Early Years Pupil Premium guide for Local Authorities.

EYPP is one of the most commonly underclaimed sources of early years funding in England. The main reasons are:

• Parents are often unaware they may be eligible
• The EYPP section of the Parental Declaration form is easy to skip
• Nurseries do not always have a reliable way to identify which children might qualify

Because EYPP is claimed through the Parental Declaration form, any form returned without the EYPP details means the nursery cannot claim that funding, even if the child is eligible.

Funding Loop allows nurseries to flag children they believe may be eligible for EYPP, making that section of the form mandatory so parents cannot submit without completing it.

These are the issues that come up most frequently:

• Expired or invalid Working Parent eligibility codes
• Missing or incomplete Parental Declaration forms
• Child names or dates of birth that do not match between the nursery's records and the local authority portal
• Attendance patterns that do not match what was agreed with parents
• Children incorrectly recorded as term-time when they are on a stretched arrangement, or vice versa
• EYPP section left blank on the Parental Declaration form
• Supporting documents such as proof of date of birth that are missing or unclear

Many of these issues can be caught before submission with the right checks in place. Reviewing completed forms carefully, checking eligibility codes early, and ensuring data matches across systems all reduce the risk of funding being delayed.

Funding Loop is designed to catch the most common errors before they reach the portal — validating data at each stage, flagging mismatches, and automating the submission process. Find out how it works or book a no-obligation demo.