Can any of you knowledgable people tell me how SureStart funding works?

I attended a meeting this week at a Surestart centre that provides Nursery places for local children. Parents have to pay but it is subsidized. It has an Ofsted rating of outstanding which no local private ones do. This provision is going to stop as the building is now going to be used for free nursery care for children age two upwards who qualify (families that would recieve free school meals - that's 90% in that area).

This means the staff will go from full time to term-time only pay, which is awful for them, but my question is around funding.

Is this two-year old provision (Gove's idea I beleive) paid for centrally or are Local Authorities expected to find the money from elsewhere (hence stopping nursery provision)?

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MY COMMENTS ARE FROM THE HORSES MOUTH AND ARE ALL FACTS

Sorry, have found this

http://www.education.gov.uk/childrenandyoungpeople/earlylearningandchildcare/delivery/free%20entitlement%20to%20early%20education/a0070230/eigel#faq2

So I'd be right to say this is making a saving for the authority? The fees for the nursery didn't cover staff costs.

I'm not saying that two year olds in this particularly deprived area of the rich South East don't deserve these places, I'm just wondering if it's necessary for the nursery children to make way.

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MY COMMENTS ARE FROM THE HORSES MOUTH AND ARE ALL FACTS