Question to the Department for Education:

To ask the Secretary of State for Education, with reference to paragraph 2.40 of the Autumn Budget 2024, HC 295, published on 30 October 2024, if she will make an assessment of the potential merits of increasing funding rates for (a) public and (b) private sector childcare providers to account for the impact of the rise in the rate of employer national insurance contributions on childcare provider costs.

As announced at Budget, the department expects to provide £8.1 billion for early years entitlements in the 2025/26 financial year, which is around a 30% increase compared to 2024/25, as the department continues to rollout the expansion of the entitlements to eligible working parents of children aged from nine months. The department is looking at what the changes to National Insurance contributions will mean for the early years sector and will provide more details as soon as possible.

The Employment Allowance will be worth up to £10,500 for eligible providers, meaning some smaller providers may pay no National Insurance at all in the 2025/26 financial year.

The department is working at pace to publish funding rates for 2025/26 as we know how important this is for local authorities and providers.