This article examines how the policy of funded early years places for 'disadvantaged' 2-year-olds (FNP) in England reconfigures spaces within early childhood and care (ECEC) in new ways of working with young children. Using practitioners' interview data from early years settings in London, this article uses Foucauldian technologies of governmentality to shed light on how FNP responds to the problem of 'disadvantage' as new mobile modes of governance. The paper explores how practitioners reconfigure their established spaces to incorporate provision and practice suitable for 2-year-olds and the challenges practitioners face in implementing the policy. The analysis considers 'space as assemblage' by focusing on three key themes: dividing spaces through split rationality, dividing practices through othering and the reconfiguration of established ways of working. The themes trace how policy-driven technologies re-interpret ECEC in narrow and alternative ways by making a set of practices possible, engendering new pedagogical relationships. This article highlights the complex conditions of (im)possibility for 'doing' ECEC under austerity. When viewed in the broader context, policy reforms are increasingly reaching into ECEC as strategic spaces for new modes of governing, sustained by a global agenda in neoliberal education reforms.