The Department for Education (Dfe) has announced that early years nurseries are set to receive a £204 million cash boost as part of the Government’s promise to deliver the largest-ever investment in childcare. The plans from the DfE, which were announced in the Spring Budget, are designed to remove significant barriers to support parents to return to work and help to grow the economy by making childcare more accessible.

Chancellor of the Exchequer, Jeremy Hunt said: “I know the cost of childcare can be a real struggle for parents and can become a barrier to work. That’s why we announced the largest-ever expansion of free childcare at Spring Budget, and today we’re increasing hourly funding rates to make sure the system is ready to deliver, including uplifting rates for a two-year-old by a third. These reforms will be transformative and ensure that we build a childcare system comparable to the best.”

Education Secretary at DfE, 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 DfE will shortly launch a consultation on how the funding for the new entitlements in 2024-25 will be distributed, to make sure it remains fair in light of the radically expanded free childcare offers. A further £12 million is also being given to local authorities this financial year to support them to effectively roll out the new offer.”

Is £204M From The DfE Enough to Tackle Sector Struggles?

Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA), said: “Any increase in funding must cover the spiralling costs that early years settings have been facing, especially inflation and staffing costs. With councils joining providers in highlighting the closures of nurseries due to cost pressures, it is vital the Government ensures that the investment makes it to the front line.

DfE cash boost - is it enough to save nurseries?

Our data shows a 50% increase in the rate of nursery closures and this is backed up by Ofsted’s statistics. Many childcare providers will receive nowhere near the average rates that have been published once regional differences and budget top-slicing have been taken into account. And for many more, it will be too little, too late, especially in relation to three and four-year-old rates.

“The first five years of a child’s life really counts. Underinvestment in our children now will have a serious impact on their educational journey and life chances in the future. If the DfE is serious about investing in early years childcare it needs to provide adequate funding to support the existing childcare infrastructure and allow providers to support their children and working families.”

The full press release on the official DfE website can be found here.

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