£755m to fund free childcare expansion

The funding will pay for the expansion of the free childcare scheme from next autumn and is a third more than the amount given to fund the offer this year.

Under the scheme, the country’s most disadvantaged two-year-olds can receive 15 hours of free childcare from a nursery or childminder each week.

Initially made available to the 130,000 most disadvantaged children, the Department for Education estimates that around 285,000 two-year-olds will be eligible for free childcare from next September.

The amount of funding provided to local authorities has been based on a national average cost of £5.09 per hour per child. It will be provided to councils on a "use it or lose it" basis, meaning the funding local authorities receive will depend on the number of children taking up the offer.

Currently, children are only eligible for the scheme if their parents receive state-funded benefits such as income support or jobseeker’s allowance, but from September places will be made available to looked-after children and those with special educational needs.

Announcing the funding today, Deputy Prime Minister Nick Clegg said: “All too often a child’s journey in life can be mapped out for them before they’ve even set foot in the classroom – that’s why investing in early education for children will give them the chance to start school on an equal footing with their peers.

“Parents, local authorities, nurseries and childminders should all be taking the opportunity to take up the offer their children are entitled to, make sure places are available and expand local childcare provision.

“Every child deserves the chance to get ahead and get on in life, regardless of their background, financial situation or family set-up.”

Purnima Tanuku, chief executive of the National Day Nurseries Association, has welcomed the announcement.

She said: “The £755m funding pot for local authorities to deliver the next raft of two-year-old places must be passed on in full to the early years providers to ensure we have enough high-quality places.

“It is important we all continue to work together and ensure all eligible disadvantaged two-year-olds can access good quality, affordable childcare.”

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years (Pacey), is encouraged by the government's support.

She said: "We hope this national focus will encourage more local authorities to promote childminding to parents of qualifying children because it is flexible and ensures the high personalised care that these very young children deserve.

"Pacey will continue to encourage childminders to talk to their local authorities about how they can be involved but local authorities also need effective working partnerships with local providers, including childminders, to ensure children get the support that best meets their needs."

However, Neil Leitch, chief executive of the Pre-school Learning Alliance, is disappointed with the amount of funding set aside for the expansion of the scheme.

He said: "We are extremely disappointed to see that there has been no increase in the average rate of funding announced last year, despite annual inflation of around three per cent and the fact that providers have repeatedly stated that this figure in no way reflects the true cost of delivery.

"Alliance members are already facing enormous challenges. Many indicate that they are subsiding year-on-year increases in costs to enable them to continue to deliver the right kind of individual and specialist support to children in their care - particularly those with more complex needs.

"Quality provision simply cannot be provided on the cheap. It is unfair - and frankly, unfeasible - to expect providers to continue to absorb the additional costs associated with delivering quality care."

In November, the government revealed that 38,000 free childcare places available under the scheme were unclaimed a month after its launch.