- At the Spring Budget 2023, the Government announced a whole package of reforms to the childcare sector to help more parents into work to grow the economy.
- These reforms include extending free childcare to all under four-year-olds by 2025, paying Universal Credit childcare support upfront rather than in arrears and substantially uplifting the hourly funding rate paid to childcare providers.
- The Government has announced local authorities will receive an initial investment of £204 million that will be distributed through a new grant to childcare providers.
Local MP Antony Higginbotham has welcomed an increase in the hourly rate paid by Government to childcare providers across Lancashire.
The uplift will see a 6.8 per cent increase in payments for children aged three to four and a 29.7 per cent increase to the hourly rate for two-year-olds.
Commenting, Antony Higginbotham MP said:
Childcare can be a huge barrier in getting parents back into the workplace. And is why I was so pleased when we announced the biggest reform to childcare in history – extending the provision of 30 free hours of childcare a week to all working parents of children aged 9 months until they start school.
That’s going to help so many families in Burnley and Padiham.
But to get to this position we need to support the sector’s growth and incentivise more people to become childminders. It will be a transition. Increasing the level of funding per child is one step in that journey. I very much welcome it.
Through a new standalone top-up grant called the Early Years Supplementary Grant (EYSG), local authorities will receive this funding, representing a total of additional £204 million in funding for childcare providers.
It will take the average rate paid for places for three and four-year-olds from its current £5.29 per hour to £5.65 per hour, and take the average rate paid for places for two-year-olds from its current £6.00 per hour to £7.95 per hour.
This funding boost is vital to support the sector as the Government rolls out record reforms across childcare services, including 30 hours free childcare to all under four children by 2025.
As more families can rely on affordable childcare, parents will be able to take up more work and help grow the economy.
Commenting, Education Secretary Gillian Keegan said:
Today is a great step forward as we deliver on the largest ever expansion of childcare which will be transformational for working families and will help grow our economy.
I want childcare to be truly affordable and available when and where parents need it.
This initial investment of over £200 million will go a long way in supporting the fantastic early years sector to prepare for the expansion of free childcare hours available to parents next year.
The changes will deliver the biggest shake up in childcare provision since 2017, helping more people across Burnley and Padiham with the cost of living and into work to grow our economy.
Working parents of 2 year olds can access 15 hours per week from April 2024 and from September 2024 all working parents of children aged 9 months to 3 years can access 15 hours per week. From September 2025 all working parents of children aged 9 months to 3 years can access 30 hours of free childcare per week.
