Spending Review: Alliance cautiously welcomes government clarification on early years funding

The Early Years Alliance has responded to the government's confirmation that additional funding will be made available for early years entitlements, worth £160 million in 2022/23, £180 million in 2023/24 and £170 million in 2024/25. This will mean funding for the sector in three years' time will have risen £510 million compared to current annual funding.

Current early entitlement funding amounts to just two thirds of the cost of 'fully funding' the entitlements, with that cost set to rise again in light of changes to the National Living Wage and the National Minimum Wage, as well as National Insurance.

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said: 

"There is no doubt that the picture for the early years sector is more positive than was suggested by the Chancellor's announcement earlier today, and we welcome what appears to be a growing recognition within government of the value of the early years. 

"As always, however, the devil is in the detail and we await further confirmation on how exactly this funding will translate into rate increases for the sector over the coming years. While the annual level of investment our sector is set to receive over the next three years will result in a higher increase in early entitlement funding rates than we have seen over recent years, there is still an incredibly long way to go to make up the £2.60 per hour funding shortfall that the government’s own cost calculations revealed.

"What’s more, we know that for many nurseries, pre-schools and childminders, even remaining afloat until next April is set to be a real struggle. As such, we would urge the government to look at what short-term, emergency support can be given to those providers already on the brink of closure.  

"Early years providers are committed to delivering quality, affordable care and education to the families that need it – but that doesn’t come cheap. We hope that today is the first step towards a new approach to early years in this country, and the delivery of the significant investment that our sector needs and deserves."


  • An initial statement from the Early Years Alliance was responding to the announcement of an additional £170m per year by 2024/25 - with no mention this would be on top of new investment for the two years prior. The budget document referred to the £170m, but did not refer to the investments of a similar size to be added for the 2022/23 and 2023/24 financial years.
  • It is unclear why the full sector funding allocation was not announced in the House of Commons, or in any of the subsequent government documents.