Inspection ratings and when can funding restrictions apply?
Most childcare providers in Staffordshire with an inspection have a rating Outstanding or Good (over 90%), so issues with quality are very rare indeed.
However, providers can receive ratings or grading which can impact the early education funding a setting can access. The Department for Education are clear that children should receive funded places in the best quality provision.
The Department for Education advise local authorities that they should secure alternative provision and withdraw funding from a provider, as soon as is practicable. Restrictions could be put be in place on provider that receive Ofsted inspection ratings of
- Inadequate
- Requires Improvement' (for 2 year olds receiving support).
And from January 2026 early years setting who received the following new gradings could also have funding restrictions:
- All funded entitlements removed from an early years setting– where the ‘Safeguarding’ standards are ‘Not met’
- 30 hours childcare for eligible working families and the universal 3- and 4-year-old entitlement removed from an early years setting– where ‘Leadership and governance’ has been graded as ‘Urgent improvement’
- The removal of the entitlement for 2-year-olds for families receiving additional support (Think2 in Staffordshire) – where ‘Leadership and Governance’ has been graded as ‘Needs attention’ or ‘Urgent improvement’
In line with government guidance that local authorities:
When withdrawing funding, local authorities should take into account the continuity of care for children who are already receiving their free hours at a provider
This means that children already attending a provider for their funded hours will not immediately have funding withdraw if parents choose to keep their children at the provider.
This mean the only children funding restrictions can impact are those who have not yet been claimed for funded hours at the provider i.e. not yet eligible for funding or new starters.
Restrictions normally remain in place until Ofsted re-inspect the provider which they have to do within 6 months of the last inspection. Providers have a right of appeal.
Providers are informed by the council to not only share the information of Ofsted’s inspection report, but they will also be informed to immediately advise parents that could be impacted by funding restrictions.
This does not affect the right of families who become eligible for funded places as they are still entitled to funding they are eligible for. But to access funded hours parents may need to seek alternative childcare provision.
