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Pre-school Education: Finance

Question for Department for Education

UIN 120847, tabled on 8 February 2022

To ask the Secretary of State for Education, with reference to the Written Statement of 25 November 2021, HCWS421 on Update on Early Years Funding, what assessment he has made of the real terms impact of that additional funding in the context of increasing inflation and costs for providers.

Answered on

21 February 2022

Since the announcement at the Spending Review last year, we have made it clear in public communications, including the Written Ministerial Statement of 25 November 2021, that the investments in 2022-23, 2023-24 and 2024-25 are all individually in comparison to the current year (2021-22).

This investment reflects anticipated cost pressures such as inflation and changes in the number of children as forecast at the time of the Spending Review.

For 2022-23 we will increase the hourly funding rates for all local authorities by 21p an hour for the two-year-old entitlement and, for the vast majority of areas, by 17p an hour for the three and four-year-old entitlement.

The department bases its population estimates on the latest available data from the Office for National Statistics (ONS). ONS data projects the 0-4 year old population will decrease by around 5% from mid-2022 to mid-2025. This is key information that needs to be taken into consideration in order to provide an accurate picture of what the funding settlement means.

We expect to announce the early years funding rates for local authorities for 2023-24 in autumn 2022 (and the following autumn for 2024-25), ahead of local authorities starting their business planning rounds for the respective financial years.

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