Written statement on Early Years Update - July 4

Minister for Children and Families (Will Quince): This government is committed to ensuring that families can access high quality and flexible childcare and early education that helps children to learn in their earliest years, provides enriching experiences around school hours and supports families and the economy by enabling parents to work.

With the cost of living rising, we want as many families as possible to benefit from the childcare support they are entitled to, saving them money, and helping to give children the best start in life.

This government has extended access to early education and childcare to millions of children and parents over the past decade. We invest a significant amount of funding in early education and childcare, including over £3.5 billion in each of the past three years on early education entitlements for two-, three- and four-year-olds.

We have also introduced tax-free childcare, which provides working parents with support of up to £2,000 a year to help with childcare costs for children under 12, or £4,000 for disabled children under 17, and Universal Credit, where parents can claim back up to 85% of eligible childcare costs, compared to 70% under tax credits.

The government has today announced plans to improve the cost, choice and availability of childcare that will benefit families and give childcare providers more flexibility and autonomy to make decisions about their settings and needs of children.

We will support more people to become childminders, which are generally the most affordable and flexible form of childcare, by:

• Reducing the upfront costs of becoming a childminder via financial support
• Allowing childminders to spend more of their time working from a greater range of locations.
• Clarifying flexibilities in childminders’ ratios when looking after their own children, or siblings of other children.
• Working with Ofsted to reduce inspection for childminders.
• Publishing a slimmed down, childminder specific Early Years Foundation Stage framework.
• Encouraging the growth of Childminder Agencies– stimulating competition and driving down costs while providing parents with more options for care.

We will also streamline the Ofsted registration process for providers. More providers registering would mean that parents have a wider choice of providers on which to use these schemes, to pay for childcare that supports their working lives.

With safety and quality at the heart, as a first step, today I am also confirming the publication of two consultations:

Childcare ratios and supervision while eating consultation

We are consulting on proposed changes to the current statutory minimum early years staff:child ratios(opens in a new tab) in England for 2-year-olds from 1:4 to 1:5; and clarifying flexibilities in childminders’ ratios when looking after their own children, or siblings of other children.

These proposals hand greater flexibility and autonomy to providers to exercise professional judgement in their staffing decisions, according to the needs of their children. This change would bring minimum requirements into line with those in Scotland.

As we continue this journey, there will be opportunities to explore further reform to statutory staffing requirements, and this document invites early views on some potential additional options.

We are also consulting on supervision requirements while children are eating, to ensure the safety of every child across early years settings. Engagement with early years providers to date suggests that for many settings, adequate supervision while eating is already understood to mean that children are within sight and hearing of a member of staff. We believe that an explicit requirement in the Early Years Foundation Stage will reinforce this practice and ensure the safety of children in early years settings.

The Early Years National Funding Formula and Maintained Nursery School funding consultation

We are consulting on Updates to the funding formulae(opens in a new tab) for the two-year-old and three- and four-year-old early education entitlements in England, the scope of which will also include the distribution of supplementary funding for maintained nursery schools.

We are proposing to update and adjust the funding formulae used to distribute the Government’s investment in the early years entitlements - which deliver 15 or 30 hours a week of free, high quality, flexible childcare for eligible two, three and four-year-olds for 38 weeks a year - fairly and transparently to local authorities across England.

Many of the datasets which underpin these formulae, and which we use to reflect geographical cost variation, are not up to date. It is important that they remain current, to ensure the funding system can be fair, effective and responsive to changing levels of need across different areas, with targeted investment towards those areas where it will do the most good. Subject to the outcome of the consultation, we are therefore planning to update the formulae for the 2023-24 financial year and intend to continue to do so annually thereafter. We are also consulting on proposals to mainstream the early years elements of the teachers’ pay grant and the teachers' pension employer contribution grant from 2023-24, bringing early years in line with schools and high needs.

The proposed update will result in some changes to local authority funding levels given costs and levels of need in certain areas will have changed relative to others. As such, we are also consulting on applying new year-to-year protections to local authority funding rates, to help local markets to manage changes better. The 2021 Spending Review settlement allows us to offer protections which means all local authorities will see an increase in the hourly rate that the government provides for 2023-24.

We are also consulting on proposals to reform maintained nursery school supplementary funding. Maintained nursery schools make a valuable contribution to improving the lives of some of our most disadvantaged children. As we have confirmed continuation of maintained nursery school supplementary funding throughout the Spending Review period, it is now right to examine the way in which this funding is distributed to LAs. We are therefore proposing to invest an additional £10 million into maintained nursery school supplementary funding from 2023-24 and are consulting on proposals to create a fairer distribution of the funding across all LAs with maintained nursery schools.

Taken together, our current and proposed reforms not only reflect the government’s commitment to supporting as many families as possible with access to high quality, affordable childcare, but also provide the foundation for taking a renewed look into the childcare system.