Today, nurseries and childminders have made progress towards implementing the government’s most extensive expansion of free childcare, as a fair funding formula is introduced to extend free childcare coverage to all ages from nine months to the start of school.

The formulation of this new plan is based on extensive data collection, considering the costs that early years providers incur in offering places for different age groups and the regional variations in these costs. The formula builds upon the existing one for three- and four-year-olds, wherein eligible working parents already receive 30 hours of free childcare per week, and all parents receive 15 hours.

The formula under consideration, currently open for consultation, includes extra funding for deprived areas, aiming to assist families in ensuring that every child receives a strong foundation for life, regardless of their location.

Furthermore, the proposed formula expands eligibility for additional disability funding and the early years pupil premium to children as young as nine months old. This means that providers will be able to access these funding opportunities for all eligible children who receive free government childcare hours.

Thanks to the historic funding increase announced during the Spring Budget by the Chancellor, the expected average rates paid to local authorities for 2024/25 have been set at £8.17 for two-year-olds and £11.06 for under twos. Remarkably, this makes the government rate for under twos almost double the average hourly fee of £5.68 typically charged to parents.

These developments align with the rollout of significantly expanded free childcare offers. Starting in April 2024, eligible working parents will receive 15 free hours for two-year-olds. Additionally, from September 2024, 15 free hours will be available from nine months, and further, from September 2025, 30 free hours will be provided from nine months until the start of school.

These offers will assist more parents in increasing their working hours or rejoining the workforce, as part of the broader government efforts to support families in coping with rising costs.

Minister for Children, Families and Wellbeing, Claire Coutinho said:

“The Education Secretary, Gillian Keegan, just announced increases to the amount we pay nurseries and childminders to offer free hours to two-year-olds. Today we’re giving providers further confidence that the largest ever expansion of free hours over the coming months and years will be properly and fairly funded.

“Working parents can start getting ready for a helping hand with costs from the end of maternity leave right up until the end of primary school, with average savings of £6,500 a year if they use the full 30 free hours for their children.”