Source · Select Committees · Education Committee
Recommendation 3
3
Accepted
Paragraph: 37
Childcare market struggles with insufficient funding, needing financial and regulatory reform
Conclusion
The childcare market is struggling, with unprecedented numbers of Early Childhood Education and Care (ECEC) professionals leaving the sector and parents struggling to find appropriate care across the country. The Spring Budget expansions of the funded entitlements place further demand on a struggling sector. To successfully deliver the Budget proposals, the sector needs radically more financial and regulatory reform, including, most importantly, a sufficient funding rate for the funded entitlements.
Government Response Summary
DfE recognises the importance of sufficient funding rates and current pressures, detailing additional funding provided through the Early Years Supplementary Grant and further uplifts for 2024-25, totalling £288 million. Funding rates for 2024-25 will be confirmed in the autumn.
Paragraph Reference:
37
Government Response
Accepted
HM Government
Accepted
DfE recognises the importance of setting funding rates for local authorities for the early years entitlements that reflect the cost of early years childcare delivery and also encourage sustainability of provision and the overall financial health of the childcare sector, especially as we expand the entitlements from April 2024. DfE recognises the current pressures that have recently been faced by childcare providers, which is why we are providing additional funding in the current financial year through the early years supplementary grant (EYSG). We are paying this grant to local authorities from September 2023, to allow them to increase funding rates paid to childcare providers. This is on top of funding uplifts already announced for the 2023–24 financial year. The 2023 Spring Budget also announced that this additional funding will continue through 2024–25, with a £288 million to allow for further uplifts to the existing entitlements hourly funding rates next year. This will be delivered through the early years funding streams via the dedicated schools grant as normal. Funding rates for 2024–25 will be confirmed in the autumn. This additional funding is on top of the £4.1 billion, a year, that the Government expects to provide by 2027–28 to facilitate the expansion of the new early years entitlements.