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1. Introduction

In July 2023 we announced £525 million to support schools with the September 2023 teachers� pay award in 2023 to 2024, with a further £900 million in 2024 to 2025. This funding has been split between mainstream schools, special schools and alternative provision (AP), early years, and 16 to 19 provision. The split reflects relative pupil numbers, and core funding amounts, across these different types of provision.

For the 2023 to 2024 financial year, £12.5m of this funding will be provided to local authorities to support early years providers delivering the government’s early years entitlements with increased teacher workforce costs from September 2023. This funding will be distributed via the early years teachers� pay additional grant (EY TPAG).

For the 2024 to 2025 financial year, £22.5m funding for teachers pay in early years will be incorporated into local authorities� core funding arrangements, through the early years funding block of the dedicated schools grant (DSG), rather than through a separate teachers� pay grant.

The following terms and conditions apply to EY TPAG, which will be paid to local authorities to cover the 7-month period between 1 September 2023 and 31 March 2024.

2. Allocation and payment to local authorities

All  local authorities that fund the government’s free early years entitlements for 3-and-4 year-olds are eligible to receive the EY TPAG. Though to note: 2 local authorities, South Gloucestershire and Hampshire, have not received an EY TPAG allocation, this is because they did not receive a large enough portion of pay grant funding to deliver a pence uplift through ‘core� TPAG rates, and in the case of Hampshire is also subject to the MNS funding cap for 2023 to 2024 and so did not see a MNS TPAG rate.  The Isles of Scilly and City of London are excluded from these allocations.

The Education and Skills Funding Agency (ESFA) will pay the EY TPAG to local authorities in a single payment on 30 November 2023, to cover the period 1 September 2023 to 31 March 2024.

For more information, see local authoritiesâ€� ·¡³ÛÌý°Õ±Ê´¡³ÒÌý²¹±ô±ô´Ç³¦²¹³Ù¾±´Ç²Ô²õÌý²¹²Ô»å technical note.

3. Allocation and payment to childcare providers

It is for local authorities to determine the most appropriate way of allocating EY TPAG funding locally. As with the roll-in of historic teacher pay and pensions funding in 2023 to 2024, we encourage local authorities to consider the purpose for which this additional funding has been provided (to address increases in teacher pay from 1 September 2023) and consider how they could target this funding to take account of the additional workforce pressures that some providers will face.

We are aware that to date different local authorities have taken a range of approaches to managing funding for teachers� pay and pensions in their local areas.  Previously, for example, some local authorities have distributed additional funding universally, to all providers locally, in recognition of the workforce cost pressures that providers are facing.

Other authorities have targeted additional funding to providers who have a greater proportion of qualified teaching staff, and who will more directly experience pressures as a result of increasing teacher pay and pension contributions. Local authorities are best placed to determine the needs amongst providers in their local areas and are encouraged to distribute this funding in a way that reflects their local circumstances.

Local authorities must pass on the funding in a clear and transparent way, so that providers can understand how allocations have been determined locally.

Given the importance of providers receiving notification of their allocations promptly, local  authorities do not need to consult with their schools forum on passing on the EY TPAGÌý´Ú³Ü²Ô»å¾±²Ô²µ to early years providers. Nonetheless, we encourage local authorities to consult with providers, where this is possible and does not create excessive delays in finalising allocations and making payments to providers.

4. Permitted use of TPAGÌý´Ú³Ü²Ô»å¾±²Ô²µ

The EY TPAG is a one-off grant, it is not part of the schools budget for the 2023 to 2024 financial year.

Local authorities must ensure that all of the EY TPAGÌý´Ú³Ü²Ô»å¾±²Ô²µ they receive is distributed to their early years providers.

°Õ³ó±ðÌýEY TPAG must not be used for contingency funding or local authority central or administration costs

5. Certification

Each local authority will be required to certify to ESFA that they have complied with these terms and conditions.

We will set out the arrangements for certification in spring 2024.

6. Further information

Books and other documents and records relating to the recipient’s accounts shall be open to inspection by the Secretary of State and by the Comptroller and Auditor General.

The Comptroller and Auditor General may, under Section 6 of the National Audit Act 1983, carry out examinations into the economy, efficiency and effectiveness with which the recipient has used its resources in discharging its grant-aided activities.

Local authorities shall provide information as may be required by the Secretary of State to determine whether they have complied with these conditions.