Guidance

Inclusive early years fund: best practice guidance for local authorities

Updated 25 June 2026

Applies to England

Who this publication is for

This publication provides non-statutory guidance from the Department for Education (DfE). It has been produced to support:

• local authorities in delivering the inclusive early years fund (IEYF)
• those involved with managing the use of the IEYF in early years settings

It is designed to support local authorities to deliver IEYF in a way that is fair, transparent and consistent, while enabling providers to use funding flexibly to meet the needs of their cohorts.

It also explains how IEYF, special educational needs inclusion funding (SENIF), and disability access fund (DAF) work together to support children with additional needs. For details on other early years funding, see the Early years entitlements: local authority funding operational guide 2026 to 2027.

This guidance should be used by early years providers to understand how IEYF should be used to support inclusion.

Purpose

The earliest years of a child’s life are foundational, when brain development is most rapid and when the right support can make the greatest and most lasting difference. Early identification and intervention can prevent needs from escalating and support strong long-term outcomes for children.

Through Giving every child the best start in life, the government set out its ambition to put the early years at the heart of delivering stronger outcomes for all children. This includes ensuring access to high-quality, inclusive early education and childcare, alongside timely support for families, supporting children’s development and providing early support as soon as they need it.

The government has recognised, through the Every child achieving and thriving white paper and associated SEND reform consultation, that the current system can create barriers to early intervention. Complex funding arrangements, workforce pressures, and the challenges of working within a system where approaches vary between local areas can make it harder for settings and families to access support consistently. As part of the SEND reform programme, the government is working towards a system that better supports inclusive practice, enables earlier action, and reduces barriers to accessing support.

All early years settings are expected to provide high‑quality provision as standard that is inclusive and accessible for all children.

For 2026 to 2027, we are introducing a £47 million IEYF. This additional funding is designed to help settings embed inclusive practices across the whole setting, such as:

• adapting the environment or curriculum
• releasing staff for training
• implementing interventions for groups of children with commonly occurring needs

All early years settings are expected to use their core early years entitlement funding to deliver inclusive provision as standard. Inclusive practice should already be embedded within high-quality provision.

Principles of the IEYF

• Strategic approach: supports setting-wide inclusive practice and supports planning for how the setting can meet the needs of children with emerging special educational needs and disabilities (SEND) today and in the future.
• Complementary funding: works alongside SENIF, DAF, and high needs funding, not as a replacement or top-up.
• Whole-setting benefit: intended to strengthen inclusion for all children across the setting, especially those with emerging SEND.

IEYF will be distributed by local authorities alongside existing funding for SEND. Existing funding streams remain:

• SENIF: targeted support for individual children or groups of children depending on local approaches
• DAF: supports disabled children’s access to the free childcare entitlements. This is for children in receipt of Disability Living Allowance (DLA)
• High needs funding: specialist support for children with more complex needs

IEYF complements these existing streams by giving settings funding which they can use to meet a range of needs immediately. Providers do not need to apply for this funding. The intention is to build a system where settings are inclusive by design. Inclusion by design recognises that children’s needs vary over time. By planning environments and teaching approaches that are accessible to all, educators can support children with long-term additional needs as well as those experiencing temporary barriers or delays in development. Strengthening this universal inclusive offer benefits all children, while helping to identify and respond to needs earlier and reduce the risk of needs escalating.

This is the first step in reforming early years SEND funding. As set out in Giving every child the best start in life, we will consult later in 2026 on changes to how early years funding is allocated and distributed under a reformed system. This will include consideration of how funding supports inclusive practice for children with SEND, as well as those whose needs may arise from or be exacerbated by disadvantage, recognising the overlap between these groups and the importance of early, effective support to meet children’s needs without unnecessary escalation or labelling. These changes reflect the wider direction of SEND reform, which aims to increase access to early, upfront support so settings can be inclusive by design and ensure settings and families do not need to navigate bureaucratic processes to receive help.

This guidance explains how IEYF, SENIF, and DAF work together to support children with additional needs. For details on other early years funding, see the Early years entitlements: local authority funding operational guide 2026 to 2027.

Using the inclusive early years fund

We expect all settings to already be delivering inclusive provision through their core funding. IEYF builds on this by supporting further improvements to inclusive practice across the setting.

Local authorities must distribute IEYF in line with the conditions of grant and should ensure that it is used to support inclusive practice across settings to benefit all children, particularly those with additional needs and SEND.

High‑quality inclusive practice benefits all children and is particularly important for children with SEND. Evidence shows that strong early year’s provision supports children’s development and can reduce the likelihood of later SEND identification.

Funding should support whole-setting inclusive practice, rather than being tied solely to individual children. Below are examples of how settings may use IEYF in practice.

Building workforce knowledge of inclusive practice

Funding to support:

• whole‑team inclusion training (for example, termly training)
• special education needs coordinator (SENCO) coaching
• staff release time to attend training during working hours

This may include time to attend local authority-funded Experts at Hand (EAH) training (but not the cost of the training itself).

Training should focus on improving the quality of universal inclusive practice, including high‑quality provision for all children and approaches to supporting those who need additional support.

Embedding and sustaining inclusive practice

Funding to support leadership time to embed learning from training, including through coaching and mentoring within the setting. This helps ensure that improvements in knowledge translate into changes in practice and improved outcomes for children.

Settings may also use funding to access coaching and mentoring from external inclusion specialists (for example, speech and language therapists (SALTs) or educational psychologists) to support sustained improvements in practice.

Facilitating multi-agency working

Allowing staff time and capacity for coordination with health and other professionals, including joint planning and participation in multi-agency support. This may include working with health services to deliver integrated reviews, such as the progress check at age 2, carried out jointly with health professionals or in collaboration so that information is shared effectively between services and with families. This supports early identification of need and provides timely, joined-up support.

Making the environment more inclusive

Making practical adaptations to ensure environments are accessible for all children. This includes:

• inclusive approaches by design, which support access for all children (for example, using visual timetables, visual supports, consistent gestures, and structured routines to help children understand expectations and transitions)
• targeted adaptations to meet individual needs (for example, adapted equipment or environments, or adjustments to routines to support children to participate and regulate)

These approaches help create environments where children can learn and play together, reducing the need for separation and supporting inclusive participation for all.

Targeted staff time to strengthen inclusive practice beyond core expectations

Particularly at key transition points. This may include SENCO time and additional staff release to support enhanced transition planning (for example, extra visits, liaison with receiving schools, and tailored preparation for children with SEND), as well as time for focused observations and support.

This may also include time for leaders to plan how to use staff effectively across the setting, including:

• balancing high-quality support for all children with more targeted support where needed
• sharing effective inclusive practice across teams

Strengthening support for families

Such as group workshops on early communication or behaviour, alongside additional time for regular parent meetings and transition support. This can be supported through links with Best Start Family Hubs. This may include working with Best Start Inclusion Practitioners based in the Hubs who collaborate with health services, SEND teams, early years settings, schools, parent groups and voluntary and community partners to provide joined‑up support for families and strengthen inclusive practice locally. Together, this approach improves access, consistency and early identification of need around the child.

It is for settings to determine how best to use IEYF funding to support inclusion within their provision. Settings should be able to clearly explain how funding has been used to strengthen inclusive practice at a whole-setting level.

As we move towards a reformed system, DfE will develop new National Inclusion Standards that set out evidence-informed tools, strategies and approaches that can be drawn on to implement whole-setting approaches for inclusion and develop effective support for children and young people with additional needs. 

Alongside this, DfE is exploring how high-quality inclusion training and continuing professional development can be made more consistently available to staff across the early years sector.

In the meantime, current published resources to support inclusive practice in settings include:

• Early Years child development training (including Module 8: Supporting individual differences and needs)
• Council for Disabled Children guidance and training on the Equality Act disability duties for early years providers

IEYF is in addition to, not in place of, SENIF.

Local authorities are expected to treat IEYF funding as a new and distinct grant that is in addition to existing funding streams, rather than using it to substitute or reduce existing SENIF spend.

Pre-existing funding streams to support children with SEN should not decrease as a result of the introduction of the IEYF.

IEYF  Distribution

Local authorities will receive IEYF funding, which they must distribute to early years settings using a formula-based approach.

DfE has provided a recommended formula for distribution in Inclusive early years fund for 2026 to 2027: conditions of grant and operational guidance for local authorities.

Local authorities may choose to use this model or develop their own bespoke formula, to best target SEND need in their area, provided it supports the objectives of IEYF and aligns with the uses of funding set out below.

Requirements for distribution

Local authorities must distribute the funding:

• upfront, enabling providers to plan strategically
• without requiring panel or application processes
• without being tied to individual children
• in a clear and transparent manner, so that providers understand how allocations have been determined locally, especially when they differ from DfE’s suggested route

They should ensure their approach to allocation supports the core objective of IEYF, which is to strengthen inclusive practice across settings.

Recommended Approach for local distribution

Local authorities are recommended to take the following approach to allocating funding locally. A:  

• base rate for all eligible settings
• deprivation factor, aligned with local criteria
• minimum funding threshold (expected to be around £1,000 per setting), to ensure allocations are sufficient to support meaningful improvements in inclusive practice

This would involve distributing the total allocation to providers based on a base rate plus an additional needs factor, (for example, using the same criteria as is used in their local early years funding formula deprivation supplement), paid in respect of 3- and 4-year-old universal hours part time equivalents (PTEs).

Local authorities can determine their own weightings but may choose to replicate the national inclusive early years fund formula which is weighted 75% base rate and 25% additional needs factors.

Local Discretion

Local authorities have flexibility to adapt their formula to reflect local needs.

In doing so, they should:

• ensure their approach remains aligned with the objectives of IEYF
• consider how funding design impacts different provider types, including smaller settings, or settings with historically high proportions of SEND children
• consider additional local factors (for example, historic proportion of children with SEND in particular settings), where this supports inclusive practice

Flexibility for chains and multi-site providers

Multi-site providers may pool IEYF funding across settings within one local authority area to support strategic inclusive practice.

Where funding is managed centrally:

• providers must demonstrate how funding has benefited individual settings
• local authorities should seek proportionate assurance that funding has been used appropriately
• local authorities should ensure pooled funding continues to deliver clear benefits at setting level

Further detail

Detailed methodology and conditions, including how to calculate allocations and apply weighting, are set out in the Inclusive early years fund for 2026 to 2027: conditions of grant and operational guidance for local authorities.

Settings not receiving IEYF

IEYF is designed as a strategic, setting‑level fund to support whole‑setting approaches to inclusion. To ensure allocations are meaningful, local authorities may apply a minimum funding threshold, meaning childminders and smaller providers may not receive IEYF funding.

However, childminders and smaller providers remain essential to the early years system, particularly in supporting children with SEND. Their flexible, home‑based care and close relationships with families support early identification of needs and inclusive practice.

We are committed to strengthening support for these providers. Childminders and smaller settings can engage with Best Start Family Hubs to support children aged 0 to 5 and their families. This includes access to Best Start Inclusion Practitioners (BSIPs), who can:

• identify emerging or developmental needs
• link families to evidence‑based interventions
• support transitions into reception
• help navigate SEND pathways and local services

Local authorities should ensure these providers are aware of and can access early years SEND funding, including SENIF, DAF and high needs funding, through clear and timely processes.

Childminders and smaller settings are also encouraged to use wider support available, such as:

• early years stronger practice hubs
• early years SEND continuing professional development (CPD) and SENCO training
• specialist support, including Experts at Hand (where available)
• locally commissioned services

New national early years SEND training will be available to all practitioners, including childminders, from September 2027. This will be developed with input from childminders. In addition, the Stronger Practice Hubs programme is expanding to include dedicated Childminder Advisors, and early years SENCO training is being strengthened to better reflect childminders’ needs.

IEYF accountability and assurance

The conditions of grant set out the statutory requirements for use of the IEYF. Local authorities and early years providers are responsible for ensuring that funding is used appropriately and can demonstrate this.  

Local authorities should always refer to the Inclusive early years fund for 2026 to 2027: conditions of grant and operational guidance for local authorities in full.

How accountability works

Local authorities are accountable for:

• allocating IEYF correctly using a clear local methodology
• checking that providers have used the funding for inclusive practice
• keeping sufficient records to give local authorities confidence that the money has been spent appropriately
• reporting information back to DfE at year end through the forms distributed

Providers are accountable for:

• using IEYF only for inclusive practice activities
• keeping financial evidence of what was spent
• responding to information requests from their local authorities

These responsibilities are set out fully in the Inclusive early years fund for 2026 to 2027: conditions of grant and operational guidance for local authorities.

What local authorities need to do

Have a clear, documented allocation approach

This should explain how:

• the local authority identifies eligible providers
• allocation amounts are calculated

This does not need to be long or complex - a short note or annex is sufficient.

Collect proportionate evidence from providers

Local authorities should gather only the information needed to assure themselves that IEYF was used appropriately. This can be done through either a:

• simple annual return
• light-touch sampling approach

Examples of acceptable evidence:

• a short narrative describing what the funding supported
• a few bullets linking spending to inclusive practice
• receipts or basic financial records (where appropriate)

Local authorities may carry out detailed audits where they have specific concerns.

Keep proportionate local records

To satisfy the conditions of grant, local authorities should keep:

• the allocation methodology
• a list of providers receiving IEYF and amounts
• the evidence collected (sampled or returned)

Records should be sufficient to provide assurance that funding has been used appropriately and, where possible, aligned with existing processes.

Ensure all IEYF is passed on and spent

Local authorities must:

• distribute all IEYF within the year
• ensure providers spend it by 31 March 2027 - where funding is not spent within the required timeframe, or cannot be evidenced as having been used for eligible purposes, local authorities should consider whether funding should be recovered in line with local arrangements
• return any unspent funds to DfE

Local authorities may align IEYF assurance and monitoring processes with existing SENIF arrangements where appropriate, to minimise duplication and reduce administrative burden.

What Providers Need to Do 

Use the funding on inclusive practice

This should align with the examples set out above.

These examples support - but do not replace - the eligible uses in the conditions of grant.

Keep evidence of spending

Evidence may be requested during the funding year or as part of year-end assurance processes.

Providers may keep records, such as:

• short statements or notes
• receipts
• simple spreadsheets

They will need to submit evidence when requested by the local authority.

Respond to reasonable information requests

If the local authority asks for a short explanation or simple evidence, providers should supply it or the local authority will have the right to withhold future funding.

Spend all funding by 31 March 2027

Providers should ensure spending is completed in-year and in line with eligible uses set out in the Conditions of Grant.

Year one (2026 to 2027) expectations

Year one is intended to be supportive and developmental. Local authorities are encouraged to:

• use sampling or short returns rather than detailed monitoring - local authorities should put a process in place that gives them confidence and enough information to account for the spend to DfE
• focus on understanding how IEYF supports inclusive practice
• keep processes proportionate to the funding that providers receive

How DfE uses local assurance

• DfE will collect information at the end of the year.
• Local authorities can use the same evidence they collect locally - no separate system is needed.
• Further detail on year-end data requirements will be provided in advance to support local authorities to plan accordingly.

Illustrative examples

Childminder

Context

A registered childminder provides care for 6 children, including one child with emerging speech and language needs. As a small, home‑based setting, the childminder does not meet the local authority’s minimum allocation threshold for the IEYF. Despite limited space and operating as a sole practitioner, the childminder uses practical, low‑cost strategies embedded into daily routines to support communication development, supported by alternative SEND funding and wider local provision.

Support Available

SENIF

The childminder accesses SENIF. This is used to:

• purchase speech and language resources such as visual communication aids and structured language games
• deliver short, daily one‑to‑one communication activities, including turn‑taking play and early vocabulary development
• access relevant SEND training to strengthen inclusive practice

SENIF provides time‑limited, targeted support, helping the childminder meet the child’s needs effectively.

National Workforce Training

The childminder benefits from the national early years SEND workforce training offer, including mandatory SEND and inclusion training. This supports earlier identification of need and increases confidence in responding to emerging speech and language difficulties within a childminding setting.

Best Start Family Hubs (BSFH) Support

The childminder works with the local BSFH and links the family to a BSIP. This partnership supports early identification, access to evidence‑based interventions, improved understanding of SEND pathways, and smoother planning for transition into reception.

Impact (illustrative)

Through consistent use of visual supports, structured language routines and play‑based interventions, the child makes steady progress in communication and engagement. The childminder feels confident in identifying and responding to emerging SEND, and the family benefits from coordinated early help through the BSFH. This illustrates how childminders not receiving IEYF can continue to meet children’s needs effectively.

Nursery

Context

A nursery with 45 children on roll is working to strengthen inclusive practice. At any one time, around 6 to 8 children have identified or emerging SEND, with several showing early speech and language and social communication needs. These children do not require specialist provision but benefit from targeted, early intervention.

Suggested Funding Use

IEYF

• Provide limited release time for the SENCO or lead practitioner to review inclusive practice and plan small changes across the setting.
• Bring in a specialist once to model strategies or deliver a short staff workshop (for example, simple language‑support routines).
• Purchase a small set of resources that support groups of children with emerging needs. - Set aside a small amount of time to check how these changes are working.

SENIF

• Fund additional adult hours over a term to deliver targeted small‑group language interventions (for example, weekly sessions led by an experienced practitioner).
• Provide short‑term backfill or overtime to release staff to plan, deliver and review targeted support for children with emerging needs.

Impact (illustrative)

IEYF supports strategic planning and staff development, embedding inclusive practice across the whole-setting. SENIF complements this by funding targeted, time‑limited interventions for a small group of children with emerging SEND, helping them make progress in communication, attention and engagement, and reducing the risk of needs escalating.