Last reviewed 3 December 2021

The Department for Education has published the early years funding rates in England for 2022/23.

Local authority funding rates for three and four-year-olds will increase by 17p per hour across most areas, while rates for two-year-olds will increase by 21p per hour.

The minimum rate any council will receive from central government is now £4.61 per hour. However, individual councils will confirm the final rates that early years settings will receive as these changes apply to the hourly funding rates given to local authorities, rather than frontline providers.

The Early Years Pupil Premium (EYPP) funding rate will also increase next year from 53p to 60p per hour, equivalent to up to £342 per eligible child per year, to support better outcomes for disadvantaged three and four-year-olds. Disability Access Funding, which is an extra payment made to providers to help to make reasonable adjustments within their provision to support eligible three and four-year-old children with a disability, will rise from £615 to £800 per child.

It was also confirmed that the supplementary funding hourly rate for maintained nursery schools will increase by 3.5%, which is equivalent to the increase in the hourly funding rates for three and four-year-olds.

However, while the increase in early years funding rates will be larger than previous years, sector organisations have raised concerns that it will not compensate for years of underfunding or cover statutory rises to the National Minimum and Living Wage, the re-introduction of business rates, and other financial pressures.

Neil Leitch, chief executive of the Early Years Alliance, said:

"We welcome clarity on how the funding increase announced at the Spending Review will translate to hourly rates for councils, and importantly, confirmation that rates will see a significantly larger increase than has been the case in recent years.

"That said, the fact remains that the funding rises published today don’t come close to closing the funding gap identified by the Government’s own policy documents, and many in the sector are rightly concerned that they will still face a struggle to remain viable. Worse still, many providers won’t even find out the funding rates they themselves will be receiving until the last minute, making it impossible to budget and plan.”

All changes will come into effect in April 2022 and full details on the new rates can be found here.