Nursery World - Budget 2024: Early years sector cautiously welcomes Chancellor's plans for funding rates to rise in line with costs

Early years sector organisations have given a cautious welcome to the Chancellor’s confirmation that he would ‘guarantee rates’ for providers to deliver the expanded childcare offer, but say the 'devil is in the detail'.

Early years providers will receive an extra £500m over the next two years to keep up with wage rises PHOTO Adobe Stock

Treasury documents released after the speech provided clarification as to what this means in practice, with the Government confirming it would provide an extra £500m over two years to support the sector to deliver the expanded childcare offer.

However, it is not yet clear what measures the Government will use to ensure that rates for the funded hours rise in line with costs.

‘To support the sector to deliver the expansion of childcare support, the government is confirming that the hourly rate providers are paid to deliver the free hours offers will increase in line with the metric used at Spring Budget 2023 for the next two years,’ it states. ‘This reflects that workforce costs are the most significant costs for childcare providers and represents an estimated additional £500 million of investment over two years.’

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