Pre-school Education: Finance
The question
To ask the Secretary of State for Education, whether her Department has considered reviewing early years funding rates, including the impact on a) staff wages and b) staff recruitment and retention.
Answered by Department for Education
In 2026 to 2027 the department expects to provide over £9.5 billion for the early years entitlements, more than doubling annual public investment in the early years sector compared to 2023 to 2024. Funding rates are reviewed every year, and funding rate increases continue to reflect in full forecast cost pressures on the early years sector, including the National Living Wage announced at Autumn Budget 2025.
Cost pressures are calculated using an analytical model which considers data from the early years census, the survey of childcare and early years providers, various government forecasts such as AEG and CPI, and national living wage increases.
We are currently running a consultation on proposed changes to the early years funding system to ensure that funding is more effectively distributed to those who need it most, in a simple and efficient way.
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