Uplift in funding rates 'insufficient' to offset rising costs, childcare bodies warn

10 December 2024 3 mins read Derren Hayes Early Years

The government has announced funding increases worth an extra £2 billion a year for early years providers, but childcare organisations warn these are insufficient to offset tax rises announced at the recent Budget.

Councils have been advised to fund childcare providers based on pre-pandemic figures. Picture: Adobe Stock

On average, hourly funding rates will rise to £11.54 for children under two from next April. Picture: Iopatucaimages/AdobeStock

Hourly funding rates for the childcare entitlements in 2025/26 will rise by 3.4% for under twos, 3.3% for two-year-olds, and 4.1% for three- and four-year olds compared to levels for 2024/25, the Department for Education has announced.

While funding levels will vary across local authority areas, on average rates will rise to £11.54 for under-twos; £8.53 for two-year-olds; and £6.12 for three- and four-year olds.

The government has created a £75 million “expansion grant” to help nurseries, childminders and other providers to deliver the 35,000 additional staff and 70,000 places required to meet rising demand linked to the expansion of the funded entitlements from next September.

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Early Years Pupil Premium funded childcare Government funded hours 30 hours funded childcare Expanded entitlement, 'free' hours, 15 hours for nine-month-olds