In response to the Brennan Review of Funding for Early Childhood Education the NSW Government has announced a one off payment of $20 million to lower preschool fees for children in the year before school in 2013.

The NSW Government has also provided a $5 million capital fund to improve supply and access to services in regional and remote areas.

The Brennan Report has revealed some startling information about the state of preschool funding in NSW including:

• NSW has the highest preschool fees in Australia
• There is a lack of suitable places and up to 92 000 children may be missing out on the opportunity to attend preschool
• Around 30 per cent of NSW Government preschool funding does not focus on the target group of four-five year olds
• Current funding programs are poorly targeted and not directed towards stated early childhood education priorities.

In response to these findings the Brennan report makes a number of recommendations and the NSW Minister for Education Adrian Piccoli says the Government will be supporting all of the report's major suggestions.

These include recommendations that:

• Funding should be weighted to four and five year olds in the year before school and younger children who are disadvantaged.
• Funding should be available to long day care services (both for-profit and community based) with more funding available to community based preschools.
• Funding should be for between 12 and 18 hours access.
• There should be a temporary freeze on funding to services who would be disadvantaged by a new model.
• A review of the SCAN (Supporting Kids with Additional Needs) and Intervention Support Programs with a possible amalgamation of the two.
• Funding for occasional care (currently $4 million) should be maintained.
• There should be a review of DEC preschools.
• A transition to school statement should be developed.

Mr Piccoli said fee reductions would be delivered through a funding boost to services which must be passed on to families of enrolled children turning four or five on or before July 31 2013.

"Across NSW this will lead to fee reductions for families up to 26 per cent and in regional NSW the reduction will be up to 53 per cent," he said.

CEO of KU Children's Service's Christine Legg said improving affordability for families would make it easier for families to access preschool.

"This funding will see the fees reduced for ever four and five year old in every KU preschool. We are confident that the lower fees will see more children coming to preschool," said Ms Legg.

Ms Legg also welcomed the release of the Brennan Report which she said has been long awaited by the early childhood education sector:

"The report is very thorough and has highlighted some the key funding issues that have plagued NSW preschools for many years," she said.

Importantly, these initiatives are being paid for by the Commonwealth Government Universal Access Fund and not by the NSW State Government.

The Commonwealth provided $68.9 million to assist the NSW Government fund universal access to preschool and the $25 million necessary to pay for these initiatives is being taken from that pot.

Mr Piccoli said the remaining $43.9 million would be used to keep fees as low as possible and to support preschool services as they transition to a new funding model based on the Brennan Report in 2014.