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Childcare Reforms

Volume 741: debated on Wednesday 29 November 2023

The bold and transformative reforms to childcare that this Government announced at the spring Budget, including the single biggest investment in childcare in England ever made, will help to give children the best start in life and is a core element to our long-term strategy to grow the economy and get people back into work.

By 2027-28, we expect the amount of money we are investing in childcare to have doubled from £4 billion to £8 billion each year. It will give working parents 30 free hours of childcare per week from when their children are nine months old until they start school.

Today’s announcements are a vital next step to deliver our new entitlements for parents, providers, local authorities, and the early years sector in preparation for the first phase of delivery in April 2024.

They include details of when and how eligible working parents of two-year-olds can apply to receive the first 15 hours free childcare for two-year-olds and the significant increases to sector funding to support the successful delivery of the upcoming entitlements.

Early years funding

We have published the new local authority rates funding for 2024-25 alongside the Government’s response to the recent consultation on early years funding.

In 2024-25, we are providing over £400 million additional funding to deliver a significant uplift to the hourly rate paid to local authorities for the entitlements. This includes £67 million of new funding to reflect the 9.8% increase in the national living wage from April 2024, £57 million in recognition of teacher pay and pension costs in 2024, and the £288 million additional funding for 2024-25 announced at spring Budget in March 2023.

The final local hourly funding rates for 2024-25 include an average 4.7% increase for the current three and four-year-old entitlement, from £5.62 in 2023-24 to £5.88 in 2024-25. Average funding rates for two-year-olds will be £8.28 per hour, and rates for under-twos will be £11.22 per hour.

As set out in the Government response to our consultation, there was broad agreement with our proposals relating to funding the entitlements for two-year-olds and under-twos, and we will implement the majority of the proposals included in the consultation. This includes a new national funding formula to distribute entitlement funding for two-year-olds and under-twos, extending the majority of the existing local funding rules to the new entitlements, and extending eligibility for the disability access fund and the early years pupil premium to younger age groups. These proposals will ensure that funding for the early years entitlements are distributed fairly and efficiently, and support delivery of the entitlements across the country. The full consultation response has been published on

Full details of the 2024-25 local authority hourly funding rates, including step-by-step tables, have been published on id="45WS" class="column-number" data-column-number="45WS">

Childcare entitlement codes

From 2 January, eligible working parents will be able to apply for their 15 hours childcare for their two-year-olds. Parents have until 31 March to apply for a code.

To apply for a childcare code, each parent needs to be working and earning the equivalent of 16 hours a week at national minimum/living wage. This means that each parent needs to earn from just over £9,500 per year to be eligible for 15 hours a week of childcare during term time. Parents must also each earn under £100,000 adjusted net income per year to remain eligible for the entitlement.

More information on the range of childcare support available to parents can be found on the Childcare Choices website, where parents can explore the early education entitlements and other Government help with childcare costs.

Capital funding allocations

We will publish this week the allocations of the £100 million of capital funding for the 2023-24 financial year to support local authorities in delivering the expansion of the 30 hours early years entitlements and our commitment that all parents will be able to access wraparound care from 8 am to 6 pm by 2026.

Local authorities are responsible for mapping supply and demand in their areas to ensure there are sufficient places available locally. They will be expected to work their local private, voluntary and independent providers and schools to introduce or expand childcare provision in their area where there are gaps in provision.

The funding is anticipated to help deliver thousands of new places across the country.

Full details of the allocations, including guidance for local authorities and childcare providers, will be published on this week.

Childminder grants

The childminder start-up grant scheme is open for applications from Thursday 30 November. The scheme supports new childminders by providing them with grant funding, worth up to £7.2 million, helping childminders with the cost of setting up their own businesses.

As previously announced, we are offering £600 to new childminders registering with Ofsted, and £1,200 to new childminders registering with a childminder agency, or CMA. Grants to childminders registering with CMAs will be paid in two instalments, with a six-month limit on claiming the second instalment.

Childminders must apply for the grant within two months of registering as a childminder, or within two months of the scheme launching.

The scheme is available to all new childminders who have completed their registration on or after 15 March 2023. Individuals who have previously been registered as childminders and wish to re-register into the sector may also apply for the scheme, but there must be at least a 12-month gap between the date of their previous registration being cancelled and their new registration being finalised.

The scheme will be facilitated by Ecorys UK Ltd, and new childminders can apply on