Question to the Department for Education:

To ask the Secretary of State for Education, whether she has had discussions with the Chancellor of the Exchequer on the impact of the new Early Years Funding programme on the viability of providers where the Government’s payments do not match the nurseries current fees.

There were 15,100 childcare places in 2023 than the previous year, with 12,900 paid staff added to the same period according to 2023’s Childcare and Early Years Provider Survey.

To support providers to expand their provision further, the department is investing over £400 million of additional funding to uplift the hourly rate for the entitlements next year. This investment consists of £67 million new funding to reflect the latest National Living Wage increase, an additional £57 million to support providers in respect of teachers’ pay and pensions, and the £288 million for the existing entitlements in 2024/25 announced in the Spring Budget in March 2023. It also builds on the £204 million of additional investment to increase funding rates this year.

The department will also be providing over £4.1 billion by the 2027/28 financial year to fund 30 hours of free childcare per week (38 weeks per year) for working parents with children aged 9 months and above in England, from the term after they reach the relevant age (£1.7 billion in 2024/25, £3.3 billion in 2025/26, £4.1 billion in 2026/27, and £4.1 billion in 2027/28). Additionally, hundreds of thousands of children aged 3 and 4 are registered for a 30-hour place, saving eligible working parents up to £6,900 per child per year, helping even more working parents and making a real difference to the lives of those families.

Providers are expanding placements across the country and the department is supporting providers to deliver each stage of the entitlement expansion rollout through increases to the rate of pay, the department’s national recruitment campaign and establishing more qualification routes into the sector.