Places will be targeted at outstanding and good nurseries and on average local authorities will receive £5.09 per child per hour.
Elizabeth Truss, education and childcare minister, is urging local authorities to ensure that the full rate is passed on to providers and reaches the frontline.
Nurseries and childminders will receive a flat rate of funding to offer places to two-year-olds, based on their area’s average costs.
In future, local authorities will be funded based on the number of children that are actually using the places, on what the Department for Education called, ‘a use it or lose it’ basis. This means that local authorities not deemed to have ensured that parents are taking up their places will receive less money.
A breakdown of the funding allocations that each local authority in England will receive to provide two-year-old places in 2013-14 has also been published on the department’s website.
Details of how much each local authority has spent will be published on the Department for Education’s website so that providers will be able to see whether the full funding allocations have been passed on to them.
From September 2013, 130,000 two-year-olds from low-income families will be eligible for 15 hours a week of early education.
The Department for Education said that the average rate of £5.09 per child per hour was significantly higher than the average hourly rate charged by providers for a child under-two in England, which according to the Daycare Trust is £4.13 an hour, and that this rate would enable high quality staff to be recruited and retained.
The Government is calling on local authorities to raise awareness of the two-year-old places to ensure that as many families as possible take up the offer.
Ms Truss said, ‘I am calling on schools, nurseries and childminders to step up to the challenge so that all two-year-olds from low-income families are in good or outstanding settings.
‘We know that only high-quality early education has a long-term impact on school readiness. Therefore, I am urging local authorities to pass on all the funding for places to the front line, so that providers are able to retain and recruit the top quality staff that our youngsters deserve.’
The Government's aspiration is that all eligible two-year-olds will be offered places in good or outstanding settings.
An evaluation of the early education pilot for two-year-olds, published in 2009, concluded that in order to have a positive impact on children’s outcomes, only settings that had been rated good or outstanding by Ofsted should be used to provide places for disadvantaged two-year-olds.
Kathy Sylva, professor of educational psychology at Oxford University and co-author of the report, said, ‘Research from several countries shows that the participation of two-year-olds in early learning and childcare has benefits for their development.
‘A recent study by the University of Oxford and NatCen Social Research shows that two-year-olds who attended high quality childcare made more progress than children from similar backgrounds who remained at home or attended lower quality provision. The quality of childcare can make a big difference to the development of young children, especially the most vulnerable.’
Ofsted comparison tool
A new online tool from Ofsted, also launched today, called Data View, will allow parents and providers to compare the Ofsted grades of early years providers in their area with those of neighbouring local authorities or of a similar type. The resource allows you to see a percentage breakdown of providers' Ofsted grades across regional, local authority and constituency areas from 2009 to 2012.
Searches can also be carried out according to type of provision - childcare on non-domestic premises or childminder, for example - as well as by level of deprivation. You can also sort results to compare children's outcomes in the EYFS in different areas.
