Question to the Department for Education:

To ask the Secretary of State for Education, whether her Department is taking steps to help ensure that early year providers have sufficient capacity to maintain provision for previously-enrolled children following the extension of eligibility for free childcare.

In the Government’s Spring Budget, my right hon. Friend, the Chancellor of the Exchequer, announced transformative reforms to childcare for parents, children and the economy. By 2027/28, this Government will expect to be spending in excess of £8 billion every year on free hours and early education to help working families with their childcare costs. This represents the single biggest investment in childcare in England ever.

The Government is providing £204 million in 2023/24, increasing to £288 million by 2024/25 for local authorities to increase the hourly funding rate to providers, increasing year on year to meet rising cost pressures. This substantial uplift is for local authorities to increase the hourly rates paid to providers for delivering the existing entitlements.

The additional £204 million in 2023/24 allows an increase by an average of 32% for the current 2-year-old entitlement, and by an average of 6.3% for the 3-and 4-year-old entitlements. For 2-year-olds, this means that the average hourly rate has risen from the current £6 per hour in 2023-24 to an effective £7.95 per hour. The 3-and 4-year-old national average hourly rate has increased from £5.29 to an effective £5.62 from September 2023.

The Spring Budget also announced an additional £288 million for 2024/25 to allow for further uplifts next year. Funding rates for 2024/25 will be confirmed in the autumn. This is in addition to £4.1 billion of funding provision by 2027/28 to deliver the new offers.

The department is ensuring a phased implementation of the expansion to the 30 hours offer to allow the market to develop the necessary capacity. The sufficiency of childcare places is also continuously being monitored. The key measure of sufficiency is whether the supply of available places is sufficient to meet the requirements of parents and children.

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. More information 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, we discuss what action the local authority is taking to address those issues and where needed support the local authority with any specific requirements through our childcare sufficiency support contract.