Question to the Department for Education:

To ask His Majesty's Government what is the average hourly rate paid to early years providers for the 30 hours of free childcare entitlement in this financial year; and what detailed analysis they have carried out to compare that rate to the median hourly cost of childcare delivery for a child aged 3–4 years old in the private, voluntary and independent sector.

In 2025/26, the average rate per hour that the department pays to local authorities is £11.54 for under 2s, £8.53 for 2-year olds, and £6.12 for 3-and-4-year olds although this will vary by local authorities to reflect how costs vary across the country. Local authorities then use local formulae to determine the rate they pay to providers and there is a statutory duty that at least 96% (rising to 97% in 2026/27) is passed onto providers.

To inform decisions on the rate at which early years providers are funded for delivering entitlements, the department uses an analytical model which uses data from the early years census and the survey of childcare and early years providers, a large-scale and robust survey on the childcare market in England, sampling over 9,000 providers. It also considers various government forecasts such as AEG and CPI and factors in the national living wage to determine cost pressures for the early years sector.