Treasury announce £66M to increase hourly rate paid to childcare providers

Nurseries and childminders are to get extra money towards providing free childcare hours for pre-schoolers, the Chancellor has announced.

Early years spending is to increase by £66 million in 2020/21, according to spending round documents.

The extra cash is to be used to increase the hourly rate that childcare providers – such as nurseries – get to provide the Government’s free childcare offer.

Under the offer, three and four-year-olds in England get up to 30 hours of free early years care a week.

Early years leaders said that while any money is welcome, the funds “will not make even the smallest inroads” into closing the current funding gap faced by the sector.

Documents published by the Treasury say that the Government will “increase early years spending by £66 million to increase the hourly rate paid to childcare providers through the Government’s free hours offer”.

It is understood that the current minimum hourly rate that nurseries and childminders receive for every child eligible for free hours is £4.30.

Neil Leitch (pictured), 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 under-funding.

“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.”

In his statement today, Chancellor Sajid Javid also confirmed plans, first announced at the weekend, to increase the schools budget in England by £7.1 billion by 2022/23.

Mr Javid told the Commons: “A good school, inspirational teachers are the most effective engine for social mobility there is, that’s why today we are delivering on our pledge to increase school spending by £7.1 billion by 2022/23 compared to this year.

“Next year we will make sure that day-to-day funding for every school can rise at least in line with inflation and rising pupil numbers with the schools that have been historically underfunded benefiting the most.”

The tranche of education spending commitments confirmed by the Chancellor also includes extra cash for further education (FE).

Paul Whiteman, general secretary of the National Association of Head Teachers (NAHT), said: “The announcement of £7.1 billion will go some way to restoring the real-terms cuts we’ve seen in education since 2010 but will not chalk it all off.

“Schools in more affluent areas appear to benefit most, so we’ll have to look at that carefully.

“An additional £66 million for early years education is welcome, although we know that sector needs more, so that’s an area where we’ll have to keep pushing. The same is true for pupils with SEND (special educational needs and disabilities) and for students in FE and sixth form colleges.”

Sajid Javid’s Spending Round – What you need to know

Here are the key points from Chancellor Sajid Javid’s one-year spending round:

– A pledge to “turn the page on austerity” and bring about a “decade of renewal” after close to a decade of cuts.

– The Chancellor announced that day-to-day Government spending will increase by £13.8 billion next year – a 4.1% above inflation rise on 2019-20.

– Schools are set to see a cash boost, with every secondary school to be allocated a minimum of £5,000 per pupil by 2020-21, and every primary school £4,000 per pupil by 2021-22.

– A cash increase for the NHS with £33.9 billion a year by 2023-24 compared to 2018-19 budgets, and a new £1,000 personal development budget over three years for every nurse, midwife and allied health professional.

– Social care to receive an additional £1.5 billion, with £1 billion coming via a new Treasury grant and another £500 million raised through taxes.

– The Chancellor was given a chance to deliver a leadership pledge he made two months ago, giving a 6.3% spending rise to the Home Office – enough money to recruit 20,000 additional police officers.

– A £200 million grant to “transform” bus services will come out of a £490 million increase for the UK’s transport network.

– Confirmed a “rapid review of HS2” and vowed to “kick-start the infrastructure revolution” in the UK.

– Prison expansion will be given the go-ahead with a pledge to create 10,000 additional prison places while improving security.

– The Armed Forces will see a £2.2 billion funding boost, with Boris Johnson’s administration vowing to continue to meet the Nato target of spending 2% of GDP on defence.

– The foreign aid target of 0.7% of Gross National Income (GNI) will continue to be met by the new Government, Mr Javid said.

– Brexit “delivery” funding worth £2 billion was set aside to pay for more Border Force staff, “better transport infrastructure” at ports and “more support for business readiness”.

– The Cabinet minister said the “human cost” of homelessness was too high, and committed an extra £54 million to tackling rough sleeping, taking funding to reduce the blight on society to £422 million in 2020/21.

– Environmental concerns, including decarbonising Britain’s economy, tackling air quality and protecting sea life, received a £90 million funding uplift.

– The Welsh government was handed an extra £600 million and Northern Ireland allocated £400 million more.

– The Chancellor recommitted the new Government to “meeting fiscal rules” and vowed: “I won’t squander the hard work of the last nine years.”

Copyright (c) PA Media Ltd. 2019, All Rights Reserved. Picture (c) Lauren Hurley / PA Wire.

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