The Nursery Education Grant funds 15 hours free childcare a week for all 3 and 4 year olds in England and is distributed by the local authority. As this BBC article explains, research suggests local funding for nurseries may not be keeping pace with increasing costs in the form of rents, bills and wages. As a result parents can face increases in some fees as nurseries change pricing and timetable strategies.
To try and minimise the impact on parents in deprived areas, Portsmouth City Council distributes its nursery grant with a formula that includes a deprivation component, “allocated to providers on an incremental scale which recognises where more than 10% of the children attending are from the 25% most disadvantaged areas of the City”, in order to ensure centres with more children from disadvantaged areas are equipped to deal with the higher number of free hours claimants.
This is an interesting use of IMD in a local allocation formula to help prioritise services in deprived areas. More information here.