The early years sector is a crucial part of our education system. Sixty-thousand different providers, with approximately 340,000 members of staff, offer more than 1.5 million childcare places to children in England. Not only does access to affordable and flexible childcare allow parents to get back to work and earn, but we also know children who attend a good early years setting are more likely to start school ready to learn.
We have made significant progress in the past 13 years. The coalition Government introduced 15 hours of free childcare for all three- and four-year-olds in 2010; this was extended to disadvantaged two-year-olds in 2013. In 2017, the Government introduced an additional 15 hours of free childcare for working parents as well as tax-free childcare worth up to £2,000 per year for working parents with incomes below a threshold. Despite this progress, we recognise that parents and providers have both been facing acutely challenging circumstances recently.
As the Minister responsible for childcare, I’ve heard the calls for change and, with the Chancellor and the Secretary of State for Education, we have responded with a genuinely radical plan. Our new £4.1 billion package of support recognises the enormous importance of the childcare sector. Now armed with this much-needed investment, we can begin to change the shape of childcare to make it work better for families and for providers.
We are supporting settings by raising the hourly rate we pay for entitlements across the board by investing £204 million from this September to uplift the rates for existing entitlements, rising to £288 million next year. This will mean a 30 per cent increase to a national average of around £8 per hour for two-year-olds – the age group that we know it costs more to support.
Alongside the 4 per cent increase to uplift the average rate for three– to four-year-olds to over £5.50 per hour from September 2023, there have been clear promises from the Chancellor of more to come.
We know that the workforce needs help and will be working with the sector to address recruitment and retention challenges. Similarly, the number of childminders operating in the English early years sector has fallen significantly in recent years, almost halving in less than ten years. Childminders are an essential part of the system, providing fantastic home-based care to children that is often more flexible for parents. So, we are providing prospective childminders with a £600 start-up grant to cover the costs of getting up and running, and £1,200 for those joining through a childminder agency, and we will be looking at what more we can do to attract people to the profession.
Over the next couple of years, the entitlements will also expand to 30 free hours for eligible working parents of children aged between nine and 36 months. This will be fully rolled out by September 2025, giving parents of very young children more choice as they consider going back to work.
And, of course, we will match that again with appropriate funding rates – set to be around £11 per hour for under-twos from the introduction of the offer.
This is huge progress on our journey to deliver flexible and affordable childcare for hard-working families across Britain. But there is still more to be done in terms of helping the sector increase capacity to meet higher levels of demand.
In my first six months of this job, I have had the opportunity to visit many different early years settings, from nurseries in schools, to independent providers and childminders. I am always struck by the positivity and commitment of staff members who work long hours supporting our very youngest, and I am all too often overwhelmed by the joy, care and vibrancy of the setting. I know times have been tough in recent years, made harder by the Covid-19 pandemic. The measures introduced this month will help to put this incredible sector on the right footing going forward.