The money is intended to push forward the children's centre building programme in less disadvantaged areas.
Local authorities have been given capital grants to extend and modify buildings currently used for childcare provision as part of the drive to have 3,500 children's centres open by 2010.
The grant allocations come from the £4bn allocated to the Department for Children, Schools and Families (DCSF) from the Comprehensive Spending Review (News, 9 August). Local authority funding allocation has been made based on the number of under-fives, weighted to take account of regional differences. Funding will be open to private and voluntary childcare settings.
A spokesperson for the DCSF said, 'It will be mainly developed around schools, health or other community facilities, such as youth halls and church buildings that already exist, rather than being new-builds, which was the norm in the first 1,000 centres. It could involve the voluntary and private sectors.'
Early years organisations welcomed the investment but stressed the need for longer-term Government funding.
However, Steve Alexander, chief executive of the Pre-school Learning Alliance, England's largest voluntary sector provider of childcare, said that while the investment was welcome, he was concerned that there was no mention of support targeted at childcare in children's centres and Neighbourhood Nurseries in disadvantaged areas.
He said, 'The lack of long-term Government funding for childcare provision is hitting providers reaching the most disadvantaged families hard, and the burden of childcare costs is falling increasingly on parents in these communities.'
He added that 'quality, affordable, universal childcare, particularly for families in areas of high unemployment and low income, can only become a reality if the true cost of providing services is acknowledged and supported'.
Purnima Tanuku, chief executive of the National Day Nurseries Association, said, 'The Neighbourhood Nurseries Initiative also helped providers deliver childcare in less advantaged areas, but now without the funding in place, many are finding themselves in an unsustainable position.'