The Department for Education has announced a significant increase in funding for local authorities to boost the hourly rates paid to childcare providers.
This announcement builds on the transformative measures set out in the Chancellor’s Spring Budget which will extend the free hours childcare entitlement to parents of children aged 9 months up to 3 years between April 2024 and September 2025. This was accompanied by additional spending commitments of £204 million in September 2023, and £288 million in 2024-25.
The Government has now confirmed the distribution of this additional funding and published the new hourly rates that each local authority will receive from September 2023. The funding rates paid to local authorities will increase by an average of 32% for the current 2-year-old entitlement, which will boost the national average hourly rate from £6 per hour to £7.95. The national average 3 and 4-year-old hourly rate will also increase from £5.29 currently to £5.62. Local authority funding rates for 2024-25 will be published in the autumn.
As a parent of young children myself, I understand that finding the right childcare enables parents to return to work confident that their child is cared for in an environment which will help them to thrive and be fully prepared for school life. However, I know that many childcare settings are under ongoing pressure to secure and retain high quality staff in the face of current economic challenges.
This announcement will help to give greater financial certainty and security to childcare providers, so that parents continue to have access to a range of quality options to suit their child and individual circumstances. You can read more about the Government’s announcement here: www.gov.uk/government/publications/early-years-supplementary-grant-2023-to-2024
The Government also plans to consult on how the new rates for children aged 9 months to 2 years will be implemented. It is vital these changes are brought in with industry involvement, and I will be engaging with childcare providers as part of this process.
