Question to the Department for Education:
To ask Her Majesty's Government what assessment they have made of the gap between funding rates and delivery costs for early years providers.
The government continues to support families with their childcare costs. My right hon. Friend, the Chancellor of the Exchequer, announced at the Spending Review a further £44 million investment in the 2021/22 financial year for local authorities to increase hourly rates paid to childcare providers for the government’s free childcare entitlement offers.
In the 2021/22 financial year, we will increase the hourly funding rates for all local authorities by 8p an hour for the entitlement for 2 year olds and, for the vast majority of areas, by 6p an hour for the entitlement for 3 year olds and 4 year olds. This will pay for a rate increase that is higher than the costs nurseries may face from the uplift to the national living wage in April 2021.
During the COVID-19 outbreak, early years settings also have access to a range of business support packages including the Coronavirus Job Retention Scheme. Attendance at childcare has been affected by the COVID-19 outbreak, but we saw attendance rise over the autumn term.
The Department for Education carries out its own regular research on the cost of delivering childcare. The 2019 provider finances report is published here: https://www.gov.uk/government/publications/providers-finances-survey-of-childcare-and-ey-providers-2019.
The provider finances report includes data on the following:
The 2019 survey of childcare and early years providers also includes information on the costs of providing childcare: https://www.gov.uk/government/statistics/childcare-and-early-years-providers-survey-2019.