Question to the Department for Education:

To ask the Secretary of State for Education, what steps her Department is taking to help ensure that differences in regional needs are taken into account in early years provision.

Under Section 6 of the Childcare Act 2006, local authorities are responsible for ensuring that the provision of childcare is sufficient to meet the requirements of parents in their area. Part B of the ‘Early education and childcare’ statutory guidance for local authorities highlights that local authorities should report annually to elected council members on how they are meeting their duty to secure sufficient childcare, and to make this report available and accessible to parents. The ‘Early education and childcare’ statutory guidance can be found here: https://www.gov.uk/government/publications/early-education-and-childcare--2.

The department has regular contact with each local authority in England about their sufficiency of childcare and any issues they are facing.

Where local authorities report sufficiency challenges, the department discusses what action the local authority is taking to address those issues and where needed supports the local authority with any specific requirements through its childcare sufficiency support contract.

The department knows that the sector is facing economic challenges, similar to the challenges being faced across the economy. The department continues to engage with sector stakeholders and local authorities to monitor dynamics with local markets, parents’ access to the government’s entitlements and the childcare they require, and the sustainability of the sector.

The government is providing £204 million this year, and £288 million in 2024/25, for local authorities to increase hourly rates paid to childcare providers, with funding uplifting year on year to meet rising cost pressures.

The additional £204m is being distributed to local authorities via a new standalone Early years Supplementary Grant (EYSG) in 2023/24.

As a result of this additional funding, funding rates to local authorities have risen by an average of 32% for the current 2-year-old entitlement, and by an average of 6.3% for the 3 to 4-year-old entitlements from September 2023, compared to their current 2023/24 rates.

The EYSG rate for 2-year-olds is, on average, £1.95 per hour. This means that the national average hourly rate that local authorities will receive has risen from the current £6 per hour to £7.95.

The EYSG rate for 3 and 4-year-olds is, on average, 33 pence per hour. Similarly, the national average hourly rate received by local authorities has risen from £5.29 to £5.62.

This funding is in addition to £4.1 billion by 2027/28 to deliver the new offers.

As part of the consultation published on 21 July, the department has published illustrative local authority hourly funding rates for those 2 years old and under for 2024/25. The department currently anticipates that, in 2024/25, the national average rates would be £8.17 for the 2-year-old entitlements and £11.06 for younger children. These illustrative rates are likely to change following the outcome of the consultation and when the latest data becomes available. The department will confirm final 2024/25 hourly funding rates for local authorities in the autumn.

The department will ensure a phased implementation of the free hours offers, to allow the market to develop the necessary capacity.