The Department for Education has launched a consultation for how funding for new childcare support entitlements in 2024-25 will be distributed, to make sure it remains fair in light of the expanded free childcare offers.
The consultation aims to set out a fair funding formula for the extension of childcare support to cover all ages from nine months to the start of school, reflecting extensive data gathering on the costs early years providers face in offering places for different age groups, and how those costs vary across the country, building on the existing formula for three- and four-year-olds.
While the three- and four-year-old average hourly rate will continue to be calculated through the existing Early Years National Funding Formula, the increase in funding announced by the Chancellor at Spring Budget has allowed the expected average rate paid to local authorities for 2024/25 to be set at £8.17 for two-year-olds and £11.06 for under two. They are also making proposals on how local authorities distribute this funding to their providers.
The consultation runs until 8 September 2023, and the Government are seeking views to make sure it remains fair in light of the radically expanded childcare support offers.
You can respond to the consultation here.
Following the consultation, final 2024-25 rates for all age groups under both formulas will be confirmed in the autumn.
A reminder of how childcare entitlements will change:
By September 2025, working parents of all children over the age of nine months to the age of 5 will be entitled to 30 hours childcare support. This will be rolled out in phases:
- From April 2024, working parents of 2-year-olds will be able to access 15 hours childcare support.
- From September 2024, 15 hours childcare support will be extended to working parents of children from age of 9 months to 3-year-olds.
- From September 2025, working parents of children aged 9 months to the age of 5 will be entitled to 30 hours of childcare support a week.
A comment from Ka Lai Brightley-Hodges, PACEY's Head of Membership and Marketing:
PACEY is encouraging all our members to take part in this consultation and have their say. We know that the increased enitlement changes still fall short of what is needed to properly support the sector however, we must take every opportunity to feedback on what is being implemented, especially when it comes to how local authorities distribute the funding to providers which we know varies depending on which local authority you are with.