Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of (a) the impact of the increase in employer's national insurance contributions and the rising National Living Wage on nursery fees, (b) the impact of the levels of insurance costs on nursery fees and (c) the impact of the levels of nursery fees on employment and the wider economy.

The government recognises that early years providers face a range of cost pressures and that the cost of childcare can influence parents’ employment decisions.

Providers set their own fees for privately purchased hours. Eligible working families can access 30 hours of government-funded childcare a week from nine months until school age to make childcare more affordable and support parents to enter work, increase their hours or remain in employment. Families using their full entitlement can save an average of £8,000 per eligible child each year. Eligible families can also receive support for childcare costs through Tax-Free Childcare and Universal Credit childcare.

In the 2026/27 financial year, the government expects to spend over £9.5 billion in the early years entitlements, with national average funding rates increasing by 4.95% for 3 to 4-year-olds before the termly funding adjustment, 4.36% for 2-year-olds, and 4.28% for 9 months to 2-years-old compared to the 2025/26 financial year. These increases reflect forecast cost pressures on the sector, including the National Living Wage announced at Autumn Budget 2025, and wider workforce pressures felt by the sector since April 2025.