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Government reveals local authority funding rates for 2020/21

By Rachel Lawlerfunding rates 2020 2021

The government has shared the early years funding rates that will be paid to local authorities in 2020/21.

The new rates include the £66 million additional investment in the sector, as announced by the Chancellor at the last Spending Round, which took place in September.

The rates show that local authorities will receive an additional 8p per hour for two-year-old funded places and up to 8p her hour more for three- and four-year-old funded places.

However, some local authorities will not see any additional funding for three- and four-year-old places.

Additional funding
Education secretary Gavin Williamson commented: “A child’s early education is crucial to their future success which is why we are increasing our hourly funding rates for councils so that they can continue to deliver high quality and free childcare places.

“Over one million children every year are now benefitting from the Government’s record investment in childcare and early years education – which will have reached £3.6 billion by next year. This will give families the flexibility they need to be able to balance their work and families lives.”

The government also announced that local authorities will continue to receive additional funding into 2020/21 for maintained nursery schools.

“Negligible impact”
Neil Leitch, chief executive of the Alliance, said: “While the government might argue that any increase in early years funding is better than nothing, the fact is that for many nurseries, pre-schools and childminders across the country, the impact of these new funding rates will be negligible.

“These providers are facing huge increases in business costs every year: rises in the national living and minimum wages, mortgages and rents, business rates, utilities costs – the list goes on and on. And yet, many have seen little to no increase in funding over recent years, and so an increase of just a few pennies is going to do little to help those already struggling to remain sustainable in the long term.

“Worst still is the news that those areas that have seen funding fall over recent years will now see their rates frozen rather than increase. For providers in these areas already fighting for survival, this could well be the final straw.

“Childcare providers play an absolutely vital role in caring for and educating children at the most important stage of their development – and yet so many are paid a pittance by government for doing so. It is insulting, it is demeaning and it cannot continue. It’s crucial, therefore, that whoever forms the next government addresses the historic underfunding in the sector and ensures that the early years providers is properly funded, both now and in the future."

Find out more
The full list of local authority funding rates for three- and four-year-olds, alongside the previous rate, is available here