MILLIONS of pounds of funding earmarked for nurseries is being left unspent – and vulnerable children could be among the worst affected.

Figures from the charity National Day Nurseries Association (NDNA) suggest three-quarters of councils are hoarding money intended to pay for free childcare, often using it to plug gaps in education funding elsewhere.

West Sussex County Council had one of the highest underspends in the country. The NDNA said last year, the county failed to spend £979,000 of Government money set aside to fund free nursery places for three and four-year-olds.

The council said it uses this money to “benefit the education of children across the county”, and said the remaining money would be used “to help the increased number of children in West Sussex with special educational needs and disabilities (SEND)”.

But The Argus has found that despite the council’s claims, children with special educational needs and disabilities could be hit the hardest by its underspending.

A spokeswoman for the NDNA explained: “While it’s good that West Sussex County Council are using this money to support children with SEND, it’s unclear exactly how much of this money will be supporting children in early years or helping nurseries to support these children.”

An NDNA spokeswoman said she understood councils are having to divert money to make up for a lack of central government funding. But she said “quietly moving money around” risks obscuring how sorely funding for both nurseries and SEND children is needed. “It means the scale of the problem is not flagged up to central government,” she said.

On the ground, nursery staff say students with special educational needs and disabilities are losing out. Speaking anonymously, the manager of a nursery in Worthing said: “We are being told that children with special educational needs require extra attention, but we’re just not able to fund it.

“Recently we were told we didn’t have funding for a person to come in and support a child with autism. We needed staff to help them access the full curriculum. They would have needed support throughout the day, with an assistant to guide them through the timetable – but we were told we couldn’t afford it.”

She believes underspending is having a knock-on effect. She said: “The money we’re getting doesn’t fully cover nursery fees. This really affects working parents, and kids have to drop out. And as the living wage rises, there’s been no increase in funding, so it costs us more to run the nursery. We can’t keep going like this.”

A West Sussex County Council spokesman pointed out government funding per pupil in West Sussex “remains among the lowest in the country”. The council said 95 per cent of its £49.3m early years 2018–19 funding allocation went to nurseries and early years education, and said “much of the balance was used to fund early years specialist consultants in areas including speech and language therapy”.

A spokeswoman for the Government’s Department for Education said nationally, the unspent money accounts for less than one per cent of the budget for early years entitlements. But the department would not address the NDNA or West Sussex County Council’s concerns that it has been underfunding nurseries.