PARLIAMENTARY WRITTEN QUESTION
(11 December 2024)

In the 2025/26 financial year alone, the department expects to provide over £8 billion for early years entitlements, an increase of over 30% compared to 2024/25, as the department rolls out the expansion of the entitlements.

This funding is distributed to local authorities as hourly funding rates, determined using the early years national funding formulae (EYNFF). The hourly rate includes funding to support providers with the cost of delivering the entitlements, including workforce costs, to deliver essential local early years services and ensure children with special educational needs and disabilities can access the funded childcare offer. The EYNFF, and local formulae which local authorities use to distribute that funding to individual providers, cover private, voluntary and independent settings, as well as public sector providers.

Alongside hourly funding rates, eligible children, in any setting, can also attract additional funding through the early years pupil premium (EYPP). Early education gives all children, and especially disadvantaged children, the best start in life. This government is therefore delivering the largest ever uplift to the EYPP, increasing the EYPP rate by over 45% from 68p per hour in the 2024/25 financial year to £1 per hour in the 2025/26 financial year, equivalent to up to £570 per eligible child per year.

On top of over £8 billion through the core funding rates, we are also providing an additional £75 million grant for the 2025/26 financial year to support the sector in this pivotal year to grow the places and the workforce needed to deliver the final phase of expanded childcare entitlements from September 2025.

In addition, pilot funding is being given to 20 local authorities to pass onto providers to recruit eligible early years staff, who spend at least 70% of their time working directly with children. Eligible joiners and returners will receive a payment of up to £1,000 after tax and National Insurance shortly after they take up post. The pilot runs from April to December 2024.