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Funding free early education entitlement for two-year-olds

Free early years education can be delivered by early years providers who registered with us and deliver the Early Years Foundation Stage (EYFS).

Changes to two year old funding come into effect from 1 April 2024.

If you deliver EYFS you will be regulated and inspected by Ofsted for the quality of education at your setting which can be delivered at:

  • a council maintained nursery school
  • a council maintained nursery unit within a primary school
  • a governor-led nursery
  • a private nursery
  • an independent school nursery
  • a registered childminder

A list of registered providers can be found on the County Durham Families Information Service website.

Your setting can receive up to 15 hours free education per week for 38 weeks (a maximum of 570 hours) of the year, although parents or carers can choose to stretch their funding over more weeks and receive less hours per week providing your setting can accommodate this.

Fifteen hours of free early years education is available for two-year-olds provided they meet certain eligibility criteria. See our Funded childcare sessions for two-year-olds page for details of eligibility for parents/carers.

Funding rate

The hourly rate for two-year-olds from 1 September 2023 to 31 March 2024 is £7.13 per hour. 

The maximum amount of funding available per funding period is:

Funding periodCalculationTotal
Summer (1 April to 31 August)13 weeks x 15 hours = 195 hours x £7.13£1,390.35
Autumn (1 September to 31 December)14 weeks x 15 hours = 210 hours x £7.13£1,497.30
Spring (1 January to 31 March)11 weeks x 15 hours = 165 hours x £7.13£1,176.45

In total there are 38 funded weeks available in a financial year.

These hours can be stretched to receive fewer hours across more weeks - contact us for more information.

You should be aware that if parents/carers of funded children exceed their maximum funded entitlement, then they will be subject to charges as per the terms and conditions of the contract agreed between you.

How to claim funding

You need to be registered with the council in order to receive funding. You can do this by contacting our Childcare Places Team (03000 268913 or They will ask you to complete a registration form.

  • If you are a childminder, private voluntary or independent setting (PVI) or a governor-led nursery based in a maintained school within County Durham then they should also complete an Early Years Provider Agreement at the beginning of every academic year (or when they first register with us) in order to receive funding. By signing the Provider Agreement, you are agreeing to the terms and conditions of the agreement. See our Useful forms for early years providers page for a copy of the agreement.
  • You will also need to send us details of your nominated bank account so we can make BACS payments directly into your account. See our Useful forms for early years providers page for a copy of the BACS form.
  • You will need to have a user ID set up for the Provider Portal.  All requests for funding are processed through the Provider Portal which is an online system. We can provide training on how to use the portal plus early years financial guidance. There is also a user guide available. See our Early years and childcare providers portal page.

Declaration forms

Parents/carers of qualifying funded children should be asked to complete a declaration form. See our Useful forms for early years providers page.

Frequency of submissions

You are entitled to receive an interim payment prior to the start of each funding period. You must calculate how many hours per week you are going to be providing for funded children for this age group. This must be sent to us using the Provider Portal by the published deadline. A payment will then be made based at 75% of the expected total for the first day of that funding period (you can choose to receive monthly or termly interim payments - see below).

The Provider Portal will then re-open from the first day of the new funding period up to and including the first week after the half-term holidays (excluding spring term which is before the half-term holidays) for you to import your details of all the funded children and their funded hours so that the overall funding total can be calculated and a balance payment processed (actual total minus interim total already paid = balance).

See the provider payment table on our Useful forms for early years providers page.

If there are any amendments (new starters, leavers or changes in funding hours per week) to your claim for funding period after the actual headcount submission period has closed, then you can submit an in-term funding adjustment for any changes using the Provider Portal.

Frequency of payments

You can choose whether to receive monthly or termly interim payments. If you select monthly then you will receive your 75% interim payment across three monthly payments for summer and autumn funding period (and two for spring funding period), followed by your actual balance payment later in that funding period.

If you choose to be paid termly then your 75% interim payment is made for the first day of the funding period, followed by your actual balance payment later in that funding period. 

Stretched funding

Parents can opt to "stretch" their child's funding across the whole year rather than access the term-time total of 38 weeks if your setting can accommodate this request. A qualifying child can still only access the same number of funded hours (570). They can access fewer hours per week, but these can be taken over more funded weeks. For example, 570 hours taken over 50 weeks equates to 11.40 hours per week.

Parents/carers should contact you to discuss this. They should be aware that if their funded child exceeds their maximum funded entitlement, then they will be subject to charges as per the terms and conditions of the contract agreed between you.

How parents access the funded entitlement

Your setting is encouraged to offer flexible packages of funded hours, subject to the following standards:

  • no session to be longer than 10 hours
  • no minimum session length (subject to the requirements of registration on the Ofsted Early Years Register)
  • no session before 6.00am or after 8.00pm
  • a maximum of two sites in a single day
  • a maximum of three registered settings in any one term

You should be aware that funded places can be delivered:

  • up to 52 weeks of the year
  • outside maintained school term times
  • at weekends

Additional charges to parents of funded children

You should ensure that free early years education should be free at the point of delivery to parents of funded children. Any additional charges made to parents/carers of funded children should be transparent and in conjunction with any terms and conditions of your contract with parents/carers of funded children. There should be no deposits requested in order to reserve a funded place. Parents should be given the option of providing a packed lunch or snack for their child.

All early years funding received from the council should be detailed on any invoice and shown as free of charge and not as a subsidy for a funded place.