Increase the hourly funding rate for 2-4 year old's in early years settings.

The funded rate for 3 and 4 year old's has not increased since it was introduced 10 years ago, and the rate for 2 year old's has decreased. Meanwhile, the cost of providing quality Early Years Education continues to rise on an annual basis through wages, rent, utilities and resources costs.

All 3 & 4 year old's in the UK are entitled to 15 hours free Early Years Education in an approved setting. The setting receives funding from the Government, per child, per hour. The hourly funding rate has never increased. From April 2016, with the introduction of the National Living Wage, many settings are facing financial loss and ruin. High quality childcare and education cannot continue to be provided without additional funding. This is national problem affecting our children's future.

The Government’s regard for the importance of providing free entitlement for childcare is underlined by the fact that more government investment and support than ever before is going towards high quality early education.

In keeping with this Government’s 2015 General Election commitment, funding has been increased by over £1 billon extra per year on free entitlements by 2019-20, including around £300 million for a significant uplift to the rate paid for 2, 3 and 4 year old entitlements. From April 2017, the national average funding rates will increase to £5.39 for two-year-olds and £4.88 for three- and four-year-olds. This shows once more the importance this Government attaches to funding high quality childcare.

Since 2010, the Government has extended the universal three and four year old entitlement from 12 ½ hours to 15 hours of childcare, and has introduced an entitlement for disadvantaged 2 year olds as well. And from 2017-18, the Government will further extend free entitlement for 3 and 4 year olds to 30 hours, doubling the number of funded hours for working parents. This is the first Government to promise such an extensive degree of childcare provision. And the quality of this provision also continues to rise; higher numbers of young children are achieving a “good level of development” than ever before, and 85% of childcare providers are rated as “good” or “outstanding” by Ofsted.

We wish to ensure that the hourly rates that childcare providers receive are sufficient to enable them to continue delivering good quality childcare, both keeping in mind current costs of provision and the implications of future cost pressures facing the sector. This is why the Government, is making a substantial increase in its investment in childcare, including its commitment to increasing the average rate of funding paid to providers. To provide a sound analytical underpinning for what this rate should be, the Government conducted a six-month comprehensive review of the cost of providing childcare; the review was published on 25th November 2015, and can be found at: https://www.gov.uk/government/publications/review-of-childcare-costs