Question to the Department for Education:

To ask Her Majesty's Government what action they are taking in relation to the underspending by local education authorities of funding earmarked for children’s early education and care which has been instead channelled into other areas of education spending.

The setting of local provider funding rates is a decision for local authorities in consultation with their Schools Forum. The free childcare offers for two-, three- and four-year-olds are demand-led and local authorities will see an underspend in their funding if take-up of any of the entitlements has not been as high as the local authority had forecast at the start of the year. Any underspend from a local authority’s early years budget is carried forward to the next financial year, and must remain within the education budget, as is set out here: https://www.gov.uk/government/publications/dedicated-schools-grant-dsg-2021-to-2022/dsg-conditions-of-grant-2021-to-2022. Local authorities must also consult with their Schools Forum on the use of their underspend, as is set out here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/945784/Schools_Operational_guide_2021_to_2022_V4_.pdf.

My right hon. Friend, the Chancellor of the Exchequer, announced on 25 November 2020 a £44 million investment in the 2021-22 financial year, for local authorities to increase hourly rates paid to childcare providers for the government’s free childcare entitlement offers. In the 2021-22 financial year we will increase the hourly funding rates for all local authorities by 8p an hour for the two-year-old entitlement and, for the vast majority of areas, by 6p an hour for the three- and four-year-old entitlement.