Inclusive Early Years Fund (IEYF) 26-27

Background

The Inclusive Early Years Fund (IEYF) complements existing funding such as special educational needs inclusion fund (SENIF), disability access funding (DAF), and high needs funding, while signalling the direction of future reform to create a simpler, more consistent approach to supporting inclusion across all early years providers.
The funding is intended to:

• help providers adopt setting-wide inclusive practices
• reduce reliance on individual child-based funding applications
• enable early intervention for children with SEND

To allow local authorities to provide timely allocations to providers, they did not need to consult with their Schools Forum on passing on the inclusive early years fund funding to early years providers, however in Bolton this was shared and discussed at the Early Years Subgroup of the Schools Forum.

Timescales

Funding of the IEYF will continue for 2027-2028 and 2028-2029.

Permitted use of funding - eligible spend

Local authorities note that all funding received via the IEYF must be distributed to eligible early years providers as additional funding, regardless of distribution method.

The funding must not be used:

• as a substitute for entitlements funding, early years pupil premium, disability access funding, SEN inclusion funding or high needs funding
• for contingency purposes
• for local authority central or administration costs

The IEYF must be distributed to providers to help them become more inclusive of children with SEND.

The funding could be used for:

• strategic planning
• workforce development
• adaptations or resources to create an inclusive environment

The Deaprtment for Education (DfE) will publish further guidance on the use of the IEYF and how it complements other SEND funding for children in Early Years.

Records and recording required

Local authorities must maintain and keep clear records of income and expenditure in relation to the IEYF, including a record of allocations and evidence of the use of funds by providers. 

Local authorities should ensure that providers are:

• Using the fund for its intended purpose
• Retaining financial records showing how the funds have been spent.

The DfE do not expect local authorities to undertake detailed audits of all providers receiving the grant. They expect local authorities to take a proportionate approach to oversight which may include:

• requesting a summary from providers of how they have used the funds
• using existing accountability mechanisms, such as review forms already used for SENIF applications
• sampling a range of provider types and sizes through existing engagement forums to understand the use of funding and any emerging trends.

Accountability 

A short questionnaire will be issued by the DfE to local authorities at the end of the 2026-27 financial year. The questionnaire will request high-level summaries from local authorities including:

• the approach taken to allocate funding, including average amounts per provider and the proportion of providers funded
• the typical ways in which providers have used the fund
• how the fund has contributed to mainstream inclusion in early years settings
• the mechanisms the local authority has used to ensure compliance.

Full details will be confirmed in the additional guidance to be issued later in 2026.

Allocations

The DfE are allocating the funding based on 3 and 4-year-old universal hours PTEs because, as a universal offer, this represents a full cohort of children and there is an increased likelihood of identifiable SEND needs emerging at this age. However, while the DfE recommends the funding is distributed based on 3 and 4-year-old universal entitlement PTE numbers, the funding is intended to benefit children across the setting as a whole.

A similar formula to the EYNFF has been used to calculate IEYF allocations to local authorities:

Bolton's Estimated Allocation

Proposal

The proposal is to allocate funding to providers based on the Spring 2026 headcount and allocate funding 75% through universal hours and 25% through universal deprivation hours.

The provisional amounts to be allocated are:

• 27p per hour Universal Hours per the Spring 2026 headcount
• 16p per hour Universal Deprivation Hours per the Spring 2026 headcount

An analysis of the estimated allocations is set out below: 

• the lowest allocation is £19
• the highest allocation is £6,109
• there are 57 settings receiving less than £500
  • The majority of these are childminders
• there are 12 settings receiving between £500 and £1,000
• there are 118 settings receiving over £1,000