New Funding rates for Nurseries and Childminders

New Funding Rates for Nurseries and Childminders 

Nurseries and Childminders have been able to benefit from a boost to the amount of funding given to local authorities for government funded childcare. It is seen as the first step towards the proposed expansion of free childcare. 

In a statement on Friday 1st September, the Department for Education (DfE) said: “nurseries and childminders up and down the country will be paid more for every Government funded hour they provide to parents.” Hourly funding rates paid to local authorities have increased from an average of £5.29 to £5.62 for three and four-year-olds, and from an average of £6.00 to £7.95 for two-year-olds. This boost to the entitlement for 2-year-olds comes as the minimum staff:child ratio is lifted to 1:5 ahead of a 15-hour funded place entitlement to be rolled out in April next year. 

Despite the DfE praising the increase in rates, many in the sector are urging caution. The level of funding does not address historic underfunding and is still widely considered to underestimate the cost of provide sustainable early years care. Regional disparities within the funding rates are also a point of criticism. Moreover, with inflation still very high, providers are questioning whether the funding rates will be sustained in the long term. Certainty on this point in particular would help businesses make decisions about their future provision. 

The Government recently closed a 7-week consultation around the proposals of funding rates for 9 months to 2-year-olds from April 2024. We are awaiting the outcome of this consultation and whether the views of the sector will be listened to.