Inclusion Funding (Element 2)

Early Years Element 2 (formerly Inclusion Funding) is aimed at supporting the inclusion of those 2 - 4 with SEND in early years provision (PVI and maintained) receiving funded education.

The Authority will only consider applications for Inclusion Funding (Element 2) for a 2 Year Old Funded place where a child has a specific need and where a young person has a funded place (see below).  There are specific SEND criteria under which an application can be made (as detailed below)


Parents can apply for a 2 year old Funded place through the NY Families Information Service if the child meets any of the criteria below:


  • are looked after by a local authority
  • have an education, health and care (EHC) plan
  • receive Disability Living Allowance
  • have left care under an adoption order, special guardianship order or a chld arrangements order

or if the parent/carer receives:

  • Income Support
  • Income-based Jobseeker's Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Universal Credit, and your household income is £15,400 ayear or less after tax, not including benefit payments
  • The guaranteed element of State Pension Credit
  • Child Tax Credit, Working Tax Credit (or both), and your household income is £16,190 a year or less before tax
  • the Working Tax Credit 4-week run on (the payment you get when you stop qualifying for Working Tax Credit)


If these criteria apply then encourage the parent to apply using the link above.   A setting can then apply for Inclusion funding (Element 2) if that child has SEND.

Please read the guidance thoroughly before making any application.

We have added additional information (see below) on Risk Assessments (including Guidance on their use and a Pro-forma) for your assistance.

NB:  An application for Element 2 funding MUST include signed Parental Consent.  If you are using a previous version of the application form below is an Inclusion Service PC for you to download.  The new application form has a parental consent at the end.

If you have any queries please e-mail or contact the Inclusion Admin team on 01609 534010 

Completed submissions must be received by the Authority on or before the deadlines as detailed in the above timetable (Applications Received).  Late applications will be put forward to the next Panel date

If there are any changes in circumstances, eg new children at your setting, children in receipt of E2 starting an additional setting or leaving,  please advise the Inclusion Fund team without delay at so that funding can be amended.


Can childminders apply for E2?

For childminders, we will need to see clarity that arrangements are being made using the funding that allows the child to access additional adult support, for example using an assistant, working with one child early in the morning, but we have no blanket policy as to how this needs to be achieved, we will consider each individual case, and how much additional support is being offered to that child.

Can I buy toys or equipment with E2?

This funding is to give additional adult support to help children meet their planned SEND outcomes, it is not intended to buy toys or equipment, even for a specific child.

If a child in your setting is eligible for Disability Living Allowance, then you may be able to claim Disability Access Funding for any purpose to help you meet the needs of that child, such as resources, training, or any additional adult support. 

Disability Access Funding Guidance Document - 2023-2024.pdf (

This is a one- off payment of £828 for eligible 3 and 4 year olds, and can be applied for in addition to E2.   

If a child in your setting needs specialist equipment to help them access your setting, then these are fully funded for settings in North Yorkshire. This includes equipment which has been prescribed by a specialist, so things like a supportive chair, a bespoke toilet seat, a radio hearing aid or a communication aid. More information is here:

What should I do if a child increases/decreases their hours or moves setting?

If any of the above apply and you receive E2 for the child, you must notify the Inclusion Fund team without delay (to avoid any overpayment) of any significant changes such as child leaving the setting or hours increasing/decreasing so E2 funding can be updated.

What should I do if a child transfers to another setting?

If a child is in receipt of Element 2 Inclusion Funding and they transfer to another setting the current setting receiving Element 2 funding must notify the Inclusion Funding team without delay. The new setting MUST apply for Element 2 funding. The funding will NOT be automatically transferred. 

What if the funded hours are split between settings?

Any additional settings identified following headcount who are claiming funded hours for the same child, but have not submitted an Element 2 application, will be required to do so in order for matched E2 funding to be considered.  This will not automatically happen.

If a child is eligible to extended hours what do I do?

You won’t need to do anything. We will make a payment for E2 comparable to the universal hours and the extended hours will be picked up following the headcount later in the term

How do I fund support for under 2s or unfunded 2 year olds in my setting?

This funding is only available for children receiving funded EY education. In most cases the low ratios for this age group, and toddler safe environments will help settings meet their needs at this stage effectively. It is important to note that settings cannot charge parents of unfunded 2s, or <2s for any SEN support they feel they need, nor can they refuse to admit them, or deny reasonable adjustments to help them access the setting in the same way as peers. Nurseries have to ensure they have a budget for this set aside should they need it, drawn from their fees.

What about out of county children?

This funding is to enable NY settings to meet the needs of the children attending.  A setting can apply to NY for E2 funding for a child who does not live in North Yorkshire but attends the NY setting. Similarly, if a child lives in NY but attends an out of county setting, the setting should apply to their own LA.

What about deferred entry?

Children staying in nursery before statutory school age can still be eligible for E2, for example summer born children who start school later. Children of statutory school age receive E2 at their school and are no longer eligible for any sort of EY funding. E2 cannot be paid after the term following the child’s 5th birthday.


Useful Documents

Application Form for Element 2

Parental Consent Form

Planning the Use of Element 2 (formerly Inclusion Funding) to Support Children in Reaching their Outcomes

Risk Assessment Guidance

Risk Assessment Proforma

Sessional Plan