Figures released by the National Day Nurseries Association (NDNA) suggest councils have used £63.5m of funds earmarked to support childcare to fund other education services.
Using freedom of information requests, the NDNA found that 95 of 130 councils reported an underspend on childcare for 3 to 4 year olds totalling £63.5m.
Of those councils reporting an underspend almost half (totalling £18.8m) kept the money in their reserves with 10 councils using the funds to offset overspends for SEND related services.
The NDNA has called on the Department for Education to put in processes to ensure money reaches the children it is intended for with NDNA Chief Executive, Purnima Tanuku, commenting “We have unravelled the true scale of the disastrous funding system which, if not addressed urgently by the Department for Education, will create a further crisis within early years.
“Early years has been chronically underfunded for years now, and yet this is the place where investment in education can make the biggest difference."