Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the effect of planned increases in the national minimum wage and the national living wage on the financial sustainability of non-maintained childcare and early education providers.

The Government will be investing £1 billion extra every year for the early years entitlements, including over £300 million a year to increase local authorities hourly funding rates. Local authorities are required to pass the vast majority of their funding on to early years providers so that they can deliver the entitlements on a sustainable and high-quality basis. The Government’s increased level of funding is based on the “Review of Childcare Costs” which looked at both the current costs of childcare provision and the implications of future cost pressures including the National Living Wage. Recent research conducted by Frontier Economics, calculated the average hourly costs of providing childcare, and the Government’s new funding rates compare very favourably to these.

The Government is also providing guidance, tools and support for providers to help make their businesses more sustainable and efficient.