PARLIAMENTARY WRITTEN QUESTION
Pre-school Education: Finance (20 March 2025)

To ask the Secretary of State for Education, what recent assessment her Department has made of the potential impact of the (a) changes to employer National Insurance contributions, (b) increase in the National Minimum Wage, (c) removal of the ability to charge for (i) consumables and (ii) compulsory extras and (d) requirement to extend funded hours of childcare provision to younger children as a standard rate on early years providers.

Asked by:
Vikki Slade (Liberal Democrat)

This government believes giving children the best start in life is the foundation of the mission to break down barriers to opportunity. We have set a milestone of a record proportion of children starting school ready to learn in the classroom. We will measure our progress through 75% of children reaching a good level of development in the early years foundation stage profile assessment by 2028. This assessment takes place at the end of reception.

In the 2025/26 financial year alone, this government plans to spend over £8 billion on early years entitlements, which is a £2 billion increase on the previous year. The department is providing an additional £75 million expansion grant to support the sector in providing the additional places and staff needed ahead of the September 2025 expansion to 30 hours of childcare and early education from when a child is nine months old. The grant is focused on the 2 year-old and under-2s cohort to target the extra costs involved in delivering the entitlements to younger children.

The department will also deliver the largest ever uplift to the early years pupil premium, increasing the rate by over 45% compared to the 2024/25 financial year, which is equivalent to up to £570 per eligible child per year. On top of this, we are providing £25 million through the National Insurance contributions grant for public sector employers in early years.

In determining funding rates for 2025/26, the department will be reflecting forecasts of average earnings and inflation next year, including the National Living Wage. In line with a recent High Court judgment, any charges providers seek to levy must not be mandatory or a condition of accessing a funded place.

Providers must offer reasonable alternatives to parents that enable them to access the entitlements for free if they wish, however we know that many parents prefer to purchase consumables from their provider and will continue to be able to do so.

The department is grateful for the fantastic work the sector is doing to deliver the expanded entitlements and prepare for the final phase from September 2025. We are engaging closely with the sector through provider roadshows and engagement with representative bodies and will continue to listen to any concerns around costs and ensure the sector is financially sustainable going forward.

Answered by:
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