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Childcare: Finance

Question for Department for Education

UIN 163897, tabled on 13 March 2023

To ask the Secretary of State for Education, what recent discussions she has had with the Chancellor of the Exchequer on childcare funding.

Answered on

21 March 2023

The department’s ministers and officials have regular discussions with HM Treasury on matters relating to early years funding.

On 15 March 2023, my right hon. Friend, the Chancellor of the Exchequer, announced that the hourly rates for the entitlements will be substantially uplifted, on top of additional investments announced in the 2021 Autumn Budget and Spending Review and on 16 December 2022.

The department will provide £204 million of additional funding this year, increasing to £288 million by 2024/25, for local authorities to further increase hourly rates paid to childcare providers, with further uplifts to follow each year. This will include an average of 30% increase in the two-year-old rate from September 2023 and mean that in 2024, the average hourly rate for two-year-olds will be more than £8 per hour and around £11 per hour for under twos. The average three to four-year-old rate will rise in line with inflation, to over £5.50 per hour from September 2023, with further uplifts beyond this.

This funding is in addition to the £4.1 billion that the government will provide by 2027/28 to facilitate the expansion of the new free hours offer, under which all eligible working parents in England will, by September 2025, be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.