Monthly payments win for childminders - a step closer to financial stability

Monthly payments win for childminders - a step closer to financial stability

From 1 October 2026, childminders in England will be entitled to receive their early years funding monthly — a long-overdue change that follows sustained campaigning by early years childcare organisations.

The Government has confirmed that local authorities in England will be required to offer monthly payment options to early years providers, including childminders, for funding entitlements. This obligation is enshrined in the Dedicated Schools Grant guidance: conditions of grant 2026 to 2027 and marks a significant policy shift for the early years sector.

Until now, payment practices have varied widely across local authorities. While some have paid in monthly instalments, others have operated on termly or even less regular schedules. For childminders — many of whom run small, independent businesses — these irregular payments have created serious cash flow challenges. Bills arrive monthly, but funding often doesn’t. When a child leaves mid-term, money is clawed back, leaving providers in financial limbo for months at a time.

Childminders share their struggles

Coram PACEY asked its members about the impact on their businesses:

“We have monthly bills and trying to budget is a nightmare. Especially if a child leaves during a term and money is then clawed back.” — Childminder in Leicestershire

“If a child leaves with immediate effect and is replaced immediately, a childminder will have to pay back money to the LA and wait up to 3 months to be paid for the new children. This is not ideal when we have bills to pay monthly.” — Childminder in Buckinghamshire

“Funding should be paid monthly as childminders are expected to receive a lump sum which personally affects my Universal Credit as I can get 4 months funding in one go.” — Childminder in Leicestershire

For some, the issue goes beyond cashflow. Receiving a lump sum — sometimes covering four months of funding at once — can have unintended consequences on benefits such as Universal Credit. Monthly payments would provide far greater financial predictability and fairness.

A positive step, but more must follow

Ka Lai Brightley-Hodges, Head of Coram PACEY, welcomed the announcement while signalling that the organisation will monitor its implementation closely.

Further reading:

The Dedicated Schools Grant guidance: conditions of grant 2026 to 2027

Coram PACEY’s written submission to the Education Committee’s inquiry into early years.