More than £2m in government funding earmarked to help nurseries recruit staff will no longer be paid out, according to Department for Education (DfE) figures.

The Early Years Financial Incentive Pilot scheme offered 20 local authorities a share of £4,940,000, in two payments. The grant aimed to fund a “golden hello” of £1,000 for early years settings to offer to new starters, with the goal of boosting recruitment into the sector.

The 20 local authorities each received a share of around £2,470,000 in March this year, but only Blackpool and Salford received a second payment of £52, 110 and £121,081 respectively. The DfE says it “agreed” with the other 18 local authorities that they no longer need the second payment to deliver the pilot. 

“The second 50% of the funding was due to be paid to local authorities in June 2024,” said a DfE spokesperson. “In line with updated early years workforce projections published 17 October 2024, after DfE analysis of progress reports and in agreement with the local authorities following individual progress meetings, 18 of the local authorities are able to complete the pilot with the first half of the grant funding.”

The DfE said local authorities had shown enthusiasm for the pilot project, “creating innovative ways to increase take up and forming strong links with partners in the local authority, nurseries and job centres to work together on early years recruitment. Bus adverts, bespoke webpages, Spotify adverts, YouTube promotional videos and online case studies are a few examples of the creative ways local authorities are engaging with the pilot to increase awareness of early years careers.”

Delivery of the pilot continues until December 2024. A randomised control trial evaluation (RCT) started in July 2024 to evaluate the impact of the incentives on recruitment. Findings will be published in autumn 2025.

Birmingham City Council is one of the 18 local authorities which said it did not need the second half of the grant to deliver the project. Medusa Sojourn, owner of Ducklings Nursery Group, which has a setting in Sutton Coldfield, said the council has kept nurseries informed about the scheme, but her own setting has not needed to access the funding.

“I’m not seeing many new people entering the early years workforce –  just more of a merry-go-round ,with inexperienced practitioners jumping from setting to setting, which seems to have been the case since 2022,” she said.