DfE confirms average local authority funding rates from April 2024

Kathy Oxtoby
Wednesday, November 29, 2023

As the Department for Education (DfE) announces national average hourly funding rates, the sector warns the increase is insufficient, and adds up to more early years settings closures .

The DfE has released details of funding rates it will pay to local authorities per child from April 2024, when the first phase of the extended hours offer will be introduced.

National average hourly rates paid by the Government will be £11.22 for under twos, £8.28 for two-year-olds, and £5.88 for three- and four-year-olds from April. ‘These rates reflect the increase in the National Living Wage from April 2024, which makes up a significant proportion of providers' costs,’ the DfE said.

The DfE also announced that parents who will be eligible for the first phase of the rollout will be able to apply for a funded place for their two-year-old from 2 January 2024.

‘Increasing rates by less than five per cent only adds up to more early years settings closing’

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA) said: ‘The Government has promised more funded childcare for parents, but today’s announcement shows they are not serious about paying a fair rate for high-quality early education and care.

‘Their own policies of raising the national living and minimum wages will increase costs by at least ten per cent. Increasing rates by less than five per cent only adds up to more early years settings closing and certainly will not help employers recruit and retain more talented people that our sector desperately needs.

‘At the same time the Early Years Pupil Premium, designed to support children from more disadvantaged backgrounds, will only rise by 2p per hour or just over £11 a year. These children have the most to gain from access to early education and care places but this will not allow providers to make the kind of impact they want.

‘Parents rightly want to plan for the new offer and make arrangements with nurseries. However, until local authorities tell providers their funding for next year it will be impossible to decide how they will be able to offer these promised places.'

She added: ‘The early years funding system is too complex for parents, providers and councils leading to underspends and parents not taking up all the support they are entitled to. This is a missed opportunity to fix to some of the major challenges in the early years ahead of the planned expansion of funded childcare.’

‘Additional support announced today is still likely to fall short of what the sector needs to successfully deliver the 30-hours-expansion’

Neil Leitch, chief executive of the Early Years Alliance, said: ‘While any early years funding increases are of course welcome, the fact is that the additional support announced today is still likely to fall short of what the sector needs to successfully deliver the 30-hours-expansion in the long term.

‘This is particularly true of three- and four-year-old offer, where funding rates – which have long been wholly inadequate  – remain incredibly low. This is likely to push settings who do not, or cannot, offer places to younger children into an incredibly precarious position, meaning that many will struggle to deliver early education and care without passing this funding shortfall onto parents in the form of higher fees.

‘And let's not forget that today’s announcement only covers the rates that local authorities receive. Nurseries, pre-schools and childminders are still in the dark on their final rate, making it impossible for them to prepare for – never mind deliver – the expanded offer, at a time when many will be receiving a deluge of enquiries from parents eager to secure their funded places.'

From tomorrow (Thursday 30th November), funding will also be available for new childminders who join the profession or who completed their registration on or after 15th March 2023, or those re-registering at least 12 months after the cancellation of a previous registration. There will be £600 available for those who choose to register with Ofsted and £1,200 for those who choose to register with a childminder agency, the DfE said.



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