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HomeNews UKChildcare providers welcome £400m funding but say more support needed

Childcare providers welcome £400m funding but say more support needed

  • By Nathan Standley & Marthe de Ferrer
  • BBC news

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The Government has announced an increase in hourly rates for funded childcare places from April 2024

The Government will invest £400m in plans to expand free childcare for working parents in England from April.

The Department for Education (DfE) has also announced an increase in the funding rate for nursery places.

The average hourly rate for providers will be £11.22 for children under two, £8.28 for two-year-olds and £5.88 for three- and four-year-olds.

Suppliers called it a “welcome increase”, but said demand for venues could soon outpace capacity.

The expansion was announced in the Budget earlier this year, when Prime Minister Jeremy Hunt said the current scheme providing some families with 30 hours of free childcare a week would be expanded to cover children.

It aims to help an additional 60,000 parents of young children return to the workforce.

Eligible working parents of three- and four-year-olds received 30 hours a week of government-funded child care.

From April, working parents of two-year-olds will be able to access 15 hours of subsidized childcare.

And from September, this offer will be extended to children nine months and older, increasing to 30 hours from September 2025.

Eligibility depends on each parent or carer earning more than the equivalent of 16 hours of the National Living Wage per week.

In September, hourly funding rates increased from average:

  • £5.29, for three and four year olds, to £5.62
  • £6.00, for two year olds, to £7.95

Education Secretary Gillian Keegan said the government was “ensuring parents no longer have to choose between career and family”.

But childcare providers in England have long raised concerns about funding not matching the need for places.

Robin Walker, chair of the committee, said the childcare market faced significant challenges around “affordability and availability”. And new funding rates will have to “accurately reflect the costs of providing high quality early education and childcare” if the government is to successfully extend free hours for parents.

Children’s Minister David Johnston told BBC Radio 4’s Today program that the government is in regular direct contact with local authorities and providers to understand the cost pressures they are facing.

“We surveyed 10,000 providers nationwide to try to get the price we pay for child care right,” he said, adding he was “optimistic.” that the government can deliver each phase of the upcoming expansion of service delivery.

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Nicola Fleury runs a group of five nurseries in Salford

Nicola Fleury, who owns Kidzrus Nursery Group, in Salford, Greater Manchester, said four of her five nurseries were near capacity.

“We will have to look at where we can put these places,” she said. I just hope that for some facilities it’s not too little, too late.”

“It’s a very welcome increase but I just hope it makes a real impact.”

Early Years Alliance chief executive Neil Leitch also said the funding increase was “welcome” but “likely still falls short of the level the industry needs to successfully deliver the 30-hour extension over the long term.” term”.

“With just a few months to go before the expansion begins, it remains to be seen whether there is any hope of this policy actually having an effect in practice,” he added.

Children in difficult circumstances

Institute for Fiscal Studies (IFS) deputy director Christine Farquharson told BBC News that the sector was facing real interest rate cuts even with more funding.

“If you have to take into account all the cost pressures that child care providers face – minimum wage increases, mortgage increases, all of that – the resources per hour for three- and four-year-olds will be 10% shorter in real terms next year than in 2012,” she said.

The National Day Nursery Association (NDNA) said the announcement showed the government “is not serious about paying the right price for high-quality early education and care” and called for greater clarity on how the early years funding system works.

NDNA chief executive Purnima Tanuku highlighted the 2p per hour increase in the Early Years Premium (EYPP) – additional funding for childcare providers to support children I have a difficult situation.

“These children benefit most from access to early care and education places – but this will not enable providers to make the impact they desire,” she said.

“This is a missed opportunity to overcome some of the major challenges in the early years ahead of the planned expansion of funded childcare.”

Are you pregnant and on the daycare waiting list? Can’t extend the time you take care of your child? Are you traveling far to find suitable childcare? Share your experience by emailing

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