Childcare: Fees and Charges

(asked on 15th March 2023) - View Source

Question to the Department for Education:

To ask the Secretary of State for Education, if she will publish a breakdown of the (a) assumed and (b) actual uptake rate in hours of free childcare hours entitlements for (a) one, (b) two, (c) three and (d) four year olds in the (i) 2021-22, (ii) 2022-23, (c) 2023-24 and (d) 2024-25 academic year; and if she will make a statement.


Answered by
Claire Coutinho Portrait
Claire Coutinho
Secretary of State for Energy Security and Net Zero
This question was answered on 6th April 2023

On 15 March 2023, my right hon. Friend the Chancellor of the Exchequer announced that the hourly rates for the entitlements will be substantially uplifted, on top of additional investments announced at the Autumn Budget and Spending Review 2021 and on 16 December 2022.

The department will provide £204 million of additional funding from September 2023, increasing to £288 million by 2024/25, for local authorities to further increase hourly rates paid to childcare providers, with further uplifts to follow each year. This will include an average of 30% increase in the 2-year-old rate from September 2023 and means that in 2024, the average hourly rate for 2-year-olds will be more than £8 per hour, and around £11 per hour for under 2s. The average 3 and 4-year-old rate will rise in line with inflation to over £5.50 per hour from September 2023, with further uplifts beyond this.

This funding is in addition to the £4.1 billion that the government will provide by 2027/28 to facilitate the expansion of the new free hours offer, under which all eligible working parents in England will, by September 2025, be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.

The government does not currently provide early education entitlements for 1-year-old children. There is no data available on average hourly rates relating to that cohort.

Average hourly rates for the 2023/24 financial year, not including the uplifts from September 2023 mentioned by the Chancellor in the Spring Budget 2023, were published on 16 December 2022 and are reproduced in the table below, which also includes average hourly rates for 2022/23 and 2021/22.

Entitlement

2021 to 2022
(£)

2022 to 2023
(£)

2023 to 2024 (£)

3 and 4-year-old Universal Hours entitlement, average hourly funding rate

£4.90

£5.06

£5.31

3 and 4-year-old Additional Hours entitlement, average hourly funding rate

£4.81

£4.98

£5.23

3 and 4-year-old entitlements, combined average hourly funding rate

£4.88

£5.04

£5.29

2-year-old entitlement, average hourly funding rate

£5.55

£5.77

£6.00

The department published take-up rates based on population and headcounts for the 15 hours early years entitlement for 2-year-olds and universal 15 hours entitlement for 3 to 4-year-olds in January 2022. These were 72% and 92% respectively. Data for January 2023 is not yet available. The government does not currently provide early education entitlements for 1-year-old children, so no data is available on take-up rates relating to that cohort for January 2022 or 2023.

Notes on the average hourly funding rates:

1. 1 Part Time Equivalent (PTE) is equivalent to 15 hours of childcare.

2. National average hourly funding rates are subject to change when allocations are updated to make use of Jan 2023 PTEs and Jan 2024 PTEs, i.e., if these have different PTE distributions between local authorities.

3. For 2021-22, the 3 and 4-year-old entitlement average funding rate is made up from a Universal Hours average of £4.90 and an Additional Hours average of £4.88. Both these entitlements are funded on the same EYNFF funding rates at LA-level, but they have different PTE distributions between LAs, e.g., Universal Hours has a higher proportion of total PTEs in London LAs, which leads to different national averages. These figures are based on final allocations.

4. For 2022-23, the 3- and 4-year-old entitlement average funding rate is made up from a Universal Hours average of £5.06 and an Additional Hours average of £4.98. Both these entitlements are funded on the same EYNFF funding rates at LA-level, but they have different PTE distributions between LAs, e.g., Universal Hours has a higher proportion of total PTEs in London LAs, which leads to different national averages. These figures are based on initial allocations.

5. For 2023-24, the 3- and 4-year-old entitlement average funding rate is made up from a Universal Hours average of £5.31 and an Additional Hours average of £5.23. Both these entitlements are funded on the same EYNFF funding rates at LA-level, but they have different PTE distributions between LAs, e.g., Universal Hours has a higher proportion of total PTEs in London LAs, which leads to different national averages. These figures are based on indicative allocations.

6. The 3-4-year-old average figures for 2021-22 and 2022-23 do not include funding for the Teachers Pay Grant and Teachers’ pension employer contributions (TPPG) which from 2023-24 has been included in the hourly rate.

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