Childminder Paperwork > Policies & Procedures > Funding Fees Policy Guidance
 

Updated 7th March 2025

The DfE have produced an updated FAQ about charging guidance which you can download using the link below:

The Early Education and Childcare Entitlements Statutory Guidance -FAQ about charging

The Deptartment for Education (DfE) has updated the statutory guidance for Local Authorities in relation to funding, to be used from 1st April 2025.

Early education and childcare - Statutory guidance for local authorities [Published by the DfE - February 2025]

You should speak to your Local Authority funding team if you are unsure about any of the rules.

The information includes the statutory guidance document, a template invoice for parents and further guidance including a model agreement for Local Authorities to use.

The statutory guidance covers updates and clarifications to previous statutory guidance in relation to the 15 and 30 hour funded entitlements for parents. If parents are unsure whether they can access the funded hours, they should use the eligibility checker on the Childcare Choices website to check their entitlement.

The main changes relate to what providers can and cannot charge parents. the point of the changes is to stop early years providers from charging a top-up to the funding.

What providers can charge parents

From 1st April 2025, early years providers can charge parents an extra voluntary fee for certain things:

• Free hours - must be clearly charged on the invoice as £0.

• Additional paid hours - must be set out separately on the invoice (at your normal rate) and must not be conditional on offering the funded place.

• Food charges - parents must be able to supply their own food and not pay the fee. There isn’t an option to refuse, even if there are safeguarding reasons, allergies or storage issues.

• Non-consumables charges -for example, nappies or sun cream. Parents must be able to supply their own and not pay the fee.

• Activities charges - activities such as outings must be optional, and parents must be able to opt out without losing their child’s place. All children must receive the same quality of provision even if parents don't want to pay for additional activities.

What providers cannot charge parents

From 1st April 2025, DfE states that early years providers cannot charge:

• A top up fee – for example, the difference between your normal charges and the funding payment.

• Extra for learning resources – for example, books, crafts, toys needed to deliver childcare or education.

• Business costs – for example, a contribution to help the provider pay rent, staff wages, cleaning materials, insurance, utility bills.

• Registration fees – as a condition of parents taking up the child’s place.

• Non-refundable deposits – as a condition of parents taking up the child’s place. Deposits must be refunded.

• General charges – for example, ‘enrichment’ charges that are not itemised, sustainability charges, enhanced ratios, hourly rates etc.

Itemised invoices

By January 2026 early years providers must set out invoices to show:

• Free hours per week / term – explain to parents if you are happy to stretch.

• Additional paid hours – covered by your own Parent-Provider Contract and Fees Policy.

• Food charges – you will need to explain the types of meals and how they are provided.

• Non-consumables charges – these charges must be itemised, for example, amount charged for nappies and amount charged for sun cream if you supply them.

• Activities charges – these charges must be itemised, for example, Forest School (date attended and amount charged) and toddler group (date attended and amount charged).

Note that parents who use Universal Credit to help them with fees might not be able to claim against these additional charges.

Publishing the changes

You must set out the pattern of hours parents can attend and chargeable extras clearly for parents.

You will need to be clear to parents that they have a choice – whether to buy extra hours, whether to send food instead of paying you to supply food, whether to pay for outings etc.

Childminders do not need to put this information on their website; group providers will need to publish the information on their website.

Notes

• DfE clearly state that they will not fund childminders to care for related children. If you are unsure whether a child is related to you, you must check with your Local Authority funding team first.

• Local authorities will be responsible for ensuring early year providers are following these new rules.

• Trial periods – you might currently include trial periods in your funding contract. However, you will have already claimed for the term from the Local Authority which makes it tricky to cancel after 4 weeks if the child is not settling.

Funding Documents - Appendices

1a. Funding Letter To Parents

2. Holding Letter For Parents

3. Funding Fees Policy

3a. Ombudsman Rulings

4. Food Provision And Funding

4a. Dangers Of Reheating Food

4c. Outings And Funding

4d. Packed Lunch Policy

5. Invoicing Funded Parents from Jan 2026

6. Funding Additional Policies

Other related documents

Attendance Register Form & Guidance 

Things to consider

• Trial periods – you might currently include trial periods in your funding contract. However, you will have already claimed for the term from the Local Authority which makes it tricky to cancel after 4 weeks if the child is not settling.

• Settling-in sessions – you cannot require parents to send their children for paid settling in sessions before the contract starts. Note that if you offer settling in periods as part of funded hours, you must still ensure you deliver all the funded hours for the term.

• Paperwork – for example, at the start of the contract. You cannot charge funded parents for any initial or ongoing paperwork including registration paperwork or time spent inputting funding details (also see registration fees).

• Food – your charges will depend on your menus and whether parents want to send their child’s food or not. You might feel that you cannot cook food sent in by parents – you will need to make this decision. If there are allergies in the setting and parents choose to send in food for their child, this will need to be monitored carefully. Bear in mind that if parents do send food, you will be inspected by Ofsted on the contents of children’s lunch boxes.

• Outings – what if one family say they don’t want to pay? You might take the children regardless and pay for the child – but families talk, and it could lead to resentment. You might decide not to go unless all families pay or you might only take children to free places.

• Paid lunchtimes – you cannot create ‘artificial breaks’ like paid lunchtimes during the day and ask parents to pay your normal fees for them.

• Refunding the LA – if a child does not receive all their funding hours – for example, if they are off ill, you take time off, they go on holiday etc you must ask your LA for guidance on what to do next. Some LAs claim back up to ¼ hours if parents collect their child early and others are more flexible. If you are audited, you will need to show your attendance register with correct times in and out for the child.