- Largest ever expansion of free childcare in England backed by
fair funding for all age groups
- Expected average rate set at £8.17 for 2-year-olds and £11.06
per hour for under twos
- Plan makes sure 30 free hours of childcare for working
parents will be available across the country
Nurseries and childminders are a step closer today to rolling out
the Government’s largest ever expansion of free childcare, as a
fair funding formula is set out for the extension of free
childcare to cover all ages from nine months to the start of
school.
The new formula reflects extensive data gathering on the costs
early years providers face in offering places for different age
groups and how those costs vary across the country. It builds on
the existing formula for three- and four-year-olds, where
eligible working parents already receive 30 hours of free
childcare a week and all parents receive 15 hours.
The proposed formula, now out for consultation, provides
additional funding for areas of deprivation, helping to support
families by making sure all children get the best start in life
no matter where they live.
It also extends eligibility for additional disability funding and
for the early years pupil premium down to nine months old, so
providers will be able to access these funding streams for every
eligible child receiving free Government childcare hours.
The historic increase in funding announced by the Chancellor at
Spring Budget has allowed the expected average rate paid to local
authorities for 2024/25 to be set at £8.17 for two-year-olds and
£11.06 for under twos. This makes the Government rate for under
twos almost double the average hourly fee of £5.68 charged to
parents.
It comes as radically expanded free childcare offers are being
rolled out. On top of the existing offers, from April 2024,
eligible working parents will get 15 free hours for
two-year-olds, from September 2024, 15 free hours will be
available from nine months, and from September 2025, 30 free
hours will be available from nine months until the start of
school.
The offers will help more parents to increase their hours or
return to work, as part of wider government support to families
to help with rising prices.
Minister for Children, Families and Wellbeing, said:
“The Education Secretary, , just announced increases
to the amount we pay nurseries and childminders to offer free
hours to two-year-olds. Today we’re giving providers further
confidence that the largest ever expansion of free hours over the
coming months and years will be properly and fairly funded.
“Working parents can start getting ready for a helping hand with
costs from the end of maternity leave right up until the end of
primary school, with average savings of £6,500 a year if they use
the full 30 free hours for their children.”
The increased rates will help childcare providers invest in
training and development opportunities for their staff, building
on the up to £180 million package of learning and qualifications
the Government is providing to the sector to support the
development of the youngest and most disadvantaged children.
As part of the consultation, illustrative local authority hourly
funding rates for 2-year-olds and under twos have been set out so
that local authorities and childcare providers can see what the
proposals will mean for them.
Final 2024-25 hourly funding rates for local authorities for all
age groups will be confirmed in the autumn.
ENDS
Notes to editors
We survey 10,000 providers each year to understand the cost
pressures they face. Based on this robust data, we model the
costs involved with delivering early education to different age
groups.
Staffing is by far the largest cost, and more staff are required
for younger children.
That is why we are proposing the highest average £11.06 hourly
rate for under twos, when free hours for this age group become
available in September 2024.
Two-year-olds eligible for the existing disadvantaged
two-year-old offer are currently funded through the existing
formula, with hourly rates rising from a current average of £6 to
£7.95 this September to help prepare for the rollout of the new
two-year-old offer from April 2024. The average rate for
two-year-olds will then rise again to an expected £8.17 from
April 2024, and a single rate will be provided to local
authorities for two-year-old children eligible for
government-funded hours under the proposed new formula.
The three- and four-year-old average hourly rate is increasing to
£5.62 from this September, up from the current £5.29. This rate
will continue to be calculated through the existing Early Years
National Funding Formula.
Final 2024-25 rates for all age groups under both formulas will
be confirmed in the autumn.
