Purpose

Local authorities can distribute the inclusive early years fund to providers using the DfE recommended approach for local distribution, or they are permitted to develop a bespoke formulaic approach to best target SEND need in their area. The DfE require the funding to be made upfront, without requiring a panel or application process, without it being tied to specific children and in a clear and transparent manner. They have also suggested that providers should receive a minimum of £1,000 per setting so that the allocation is substantial enough to effect meaningful change in inclusive practice at setting level. The DfE recommended approach is to distribute the allocation to providers based on a base rate plus an additional needs factor paid in respect of 3- and 4-year-olds universal hours PTE. They also suggest this should be weighted 75% base rate and 25% additional needs factors. Those providers falling below the £1,000 allocation should have their allocations redistributed. Lincolnshire’s approach has distributed funding weighted 72% base rate and 28% additional needs factors so aligns with the DfE approach above. The use of IDACI factors within the calculation supports the correlation between SEND and deprivation in the early years. Allocations have been based on £57.77 per part-time equivalent (PTE) for 3 and 4 year olds for each setting plus a deprivation factor based on £22 per pupil within the ICADCI bands and the SEN indicator (Jan 26 data). As per DfE guidance, total allocations less

than £810 per setting have been removed, with those above £810 but below £1,000 allocated a minimum of £1,000. Local authorities must pay providers by the end of September 2026 and this should be paid as a single lump-sum payment.

The cost of this decision will be funded by DfE grant which is expected to be in the region of £0.485m. Funding is expected to be confirmed and paid in July 2026 and any funding not allocated must be returned to the DfE. The allocation method chosen does show a slight over allocation against the expected grant, but this can be met from within other Early Years budgets.

Decision

To approve the distribution of the Inclusive early years fund for 2026/27 to Lincolnshire schools and private providers (PVIs) in accordance with guidance provided for local authorities by the Department for Education (DfE). This grant complements existing funding such as special educational needs inclusion fund (SENIF), disability access funding (DAF), and high needs funding.

Alternative options considered

A number of distribution methods were considered but this approach reaches the maximum number of 241 schools and early years providers and takes account of indicators that have a correlation between SEND and deprivation. 288 schools and early years providers will not receive an allocation as they are below the minimum £810 allocation. Those above that will receive a minimum of £1,000.