Source · Select Committees · Education Committee
Recommendation 4
4
Accepted
Paragraph: 38
Collaborate closely with providers and local authorities to set sufficient childcare funding rates
Recommendation
The Department for Education should work closely and consistently with childcare providers and local authorities from across the country to set the funding rate at a sufficient level. Given that most childcare places will soon be government-funded, it is vital that the Department gets this right, or the already struggling childcare market will see even more closures.
Government Response Summary
The government acknowledges the importance of sufficient funding rates and details specific actions taken, including providing additional funding of £288 million for 2024-25 and confirming rates in the autumn, to ensure the sustainability of the childcare sector.
Paragraph Reference:
38
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.