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Nurseries: Fees and Charges

Answer

It is our ambition that all families have access to high-quality, affordable and flexible early education and care, giving every child the best start in life. This is key to the government’s Plan for Change, which starts with reaching the milestone of a record number of children being ready for school. That also means ensuring the sector is financially sustainable and confident as it continues to deliver entitlements and high-quality early years provision going forward.

In 2025/26 alone, this government plans to spend over £8 billion on early years entitlements and we have increased the early years pupil premium by over 45%. On top of this, we are providing further supplementary funding of £75 million for the Early Years Expansion Grant.

To set early years funding rates, we uplift the national average rate from the previous year taking into account cost pressures facing the sector, including forecasts of average earnings and inflation, and the National Living Wage. We use the early years national funding formulae (EYNFF) to distribute the early years entitlements budget to local authorities. The EYNFF includes a base rate for each child, which is the same minimum funding for every child no matter where they live or whether they have additional needs. This rate is based on the core costs of childcare provision and has been informed by the cost of childcare review.

To make sure we can account for the differences in costs across the country, such as on staffing and premises costs, we also apply an area cost adjustment for each area. This approach only increases funding, it never reduces the base rate or additional needs funding.

The average hourly funding rate provided for 3 and 4-year-olds since 2018 is as follows:

Year	3 and 4-year-old combined rate
2017/18	£4.76
2018/19	£4.75
2019/20	£4.75
2020/21	£4.83
2021/22	£4.88
2022/23	£5.04
2023/24 (April – August)	£5.28
2023/24 (September – March)	£5.62
2024/25	£5.88
2025/26	£6.12

Secondary information

Type

Written question

Reference

61286

Session

2024-26

Grouped for answer

Yes

Subjects

Fees and charges Nurseries

Contains statistics

Yes

Link

View this Written question on www.parliament.uk