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NEWS: Government announces England funding update for 2023/24

Today the Department for Education in England has announced the funding rates that local authorities will receive for early years funding entitlements in 2023/24. This follows a consultation earlier this summer into proposed changes to both the Early Years National Funding Formula (EYNFF) for 3- and 4-year olds and the equivalent formula for 2-year-olds. The outcome of the consultation (which received over 400 responses from stakeholders including PACEY) has been published today.  

New rates for 2023/24 

The DfE will implement its proposals that aim to ensure the funding system is responsive and targets areas of greatest need. This means Government is applying year-to-year protections so all local authorities will see funding increases of at least 1% for 2023/24, with a gains cap (maximum increase) of 4.9% and 10.0% for the EYNFF and 2-year-old formula respectively. It is also increasing the minimum funding floor for the EYNFF to from £4.61 to £4.87 in 2023/24. 

On average, under the new proposals local authorities are set to receive funding increases of 3.4% for EYNFF entitlements and 4% for the 2-year old formula. Individual local authorities have not yet released the final rates that providers will receive.  

View the funding rates for your local authority area for 2023/24 here  

Additional funding for early years 

The Government has also announced an additional £20 million funding for the early years and childcare sector to help providers meet increases in National Living Wage and Minimum Wage. This funding is on top of the additional £180m for 2023-24 already announced at the Spending Review which was made available to help providers deliver early years entitlements.   

Liz Bayram, Chief Executive at PACEY comments: 

“The additional £20m investment in our sector is a drop in the ocean for childminders, nurseries and pre-schools compared to rising inflation, staffing costs and energy bills. The Institute of Fiscal Studies earlier this week was clear that our sector is set to face an even bigger squeeze next year, meanwhile settings are closing down and dedicated practitioners leaving for better paid jobs in other sectors. Children need high quality early education, parents need childcare to be able to work and the economy needs parents to work. PACEY believes the only way forward is for government to work with the sector to develop a robust and long-term plan for funding that recognises early education and childcare as a vital part of the education infrastructure, just like schools.  

“We are also keen to understand the how the protections announced today will hold Local Authorities to account and ensure that providers receive the full funding allocations they need.”