The department’s statutory guidance requires local authorities (LAs) to work with providers to ensure that, if providers charge parents a deposit to secure their child’s free place, the deposit is refunded in full to parents within a reasonable time scale. Operational guidance for LAs and providers gives further details, stating that the purpose of the deposit is to give providers certainty that a parent will take up the place. LAs and providers should make it clear to parents that if they fail to take up their place, the provider is not obliged to refund the deposit.
LAs are responsible for ensuring that all eligible children can take up their place free of charge and that providers’ charging policies, including charging deposits, enable this. LAs must enter into arrangements with childcare providers to ensure the providers comply with legislative requirements. The LA is not required to fund a provider that is unwilling to accept these requirements.
The department’s statutory guidance is available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/682005/Early_education_and_childcare_Statutory_guidance_for-LAs.pdf.