The Chancellor of the Exchequer Sajid Javid has announced an increase of £66 million in early years funding in the government’s one-year spending review.

The extra funding will be used to boost the hourly rate paid to providers for the funded childcare entitlements. Further details are awaited on when the funding increase will be implemented and which type of providers will be eligible.

The Chancellor also confirmed a three-year spending plan to boost school funding by £7.1 billion which includes:

  • a new minimum level of per pupil spending of £5,000 in secondary schools and £4,000 in primary schools

  • an extra £700m for pupils with special educational needs

  • teachers starting salary rising to £30,000 from 2022-2023 to tackle recruitment difficulties

  • an extra £400m to support further and vocational education.

Although early years organisations have welcomed the announcement, they are warning that the £66 million pledged falls well short of the predicted £662 million shortfall in funding for the sector.

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

“The early years sector has been holding its breath, waiting desperately for some reprieve from years of government underfunding. While any extra money is welcome, the £66 million announced by the Chancellor of the Exchequer for early education will not make even the smallest inroad into bridging the £662 million funding gap in the sector.”

"We are nearing a tipping point where parents will no longer be able to bear the increase in fees and optional extras that childcare providers are forced to charge to subsidise the funding shortfall. Many childcare providers have already reached that tipping point and have closed for good. On today’s news, expect more childcare price hikes and more closures.”

Full details of the spending review can be found here.

Last reviewed 10 September 2019