Seriously, it seems dodgy to me. Pre school say it means they can buy extra resources for the children or it only goes unclaimed. I would imagine it'd just be used by the government as part of the childcare budget and hopefully, usefully used elsewhere.
I've said no, but added one extra morning in case I couldn't go up later if they ran out of spaces.
The nursery where I work was audited by the local authority at the end of last term. We had to send in all our registers, funding forms, information we send to parents about funding and fees etc. The LA also said that they would contact random families to check that the information we provided was accurate.
If the Local Authority check up on your nursery, you would be liable for the repayment of the falsely claimed funding, and the nursery could be prosecuted.
If you are not using the extra session, then don't claim for it. If you want to "reserve" that extra session, then you need to use it on a fairly regular basis to avoid it being booked fraudulently.