To ask the Secretary of State for Education, with reference to paragraph 3.49 of the Spring Budget 2023, HC 1183, what estimate she has made of her Department's planned expenditure in 2023-24 on the (a) universal 15 hours free childcare entitlement for all three and four year olds, (b) additional 15 hours free childcare entitlement for eligible working parents of three and four year olds and (c) 15 hours free childcare offer for disadvantaged children aged two.

To ask the Secretary of State for Education, with reference to the statement by the Chancellor of the Exchequer in his Financial Statement on 15 March 2023 that the additional funding for childcare providers is an average of a 30 per cent increase in the two-year-old rate this year, if she will publish the average hourly rate to be paid to childcare providers for each free childcare hour they provide to a child aged (a) two, and (b) three or four, in (i) 2022-23, (ii) 2023-24, (iii) 2024-25.

On 15 March 2023, my right hon. Friend, the Chancellor of the Exchequer, announced that the hourly rates for the entitlements will be substantially uplifted, on top of the investments announced at the Autumn Budget and Spending Review 2021 and on 16 December 2022.

On 16 December, the department announced indicative funding allocations in 2023/24 for local authorities for the 2, 3, and 4-year-old entitlements, totalling £3.927 billion. We will now provide £204 million of additional funding from September 2023, increasing to £288 million by 2024/5, for local authorities to further increase hourly rates paid to childcare providers, with further uplifts to follow each year. This will include an average of 30% increase in the 2-year-old rate from September 2023 and mean that in 2024, the average hourly rate for 2-year-olds will be more than £8 per hour, and around £11 per hour for under 2s. The average 3- and 4-year-old rate will rise in line with inflation to over £5.50 per hour from September 2023, with further uplifts beyond this.

This funding is in addition to the £4.1 billion that the government will provide by 2027/28 to facilitate the expansion of the new free hours offer, under which all eligible working parents in England will, by September 2025, be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.

The department will provide further details of the distribution of the uplifted funding to local authorities for 2023/24 and for 2024/25, including average hourly rates for the 2, 3 and 4-year-old entitlements, which are demand-led, in due course.

Average hourly rates for the 2023/24 financial year, not including the abovementioned uplifts, were published on 16 December 2022, and are reproduced in the table below, which also includes average hourly rates for 2022/23.

Notes on the averages:

1. 1 Part Time Equivalent (PTE) is equivalent to 15 hours of childcare.
2. National average hourly funding rates are subject to change when allocations are updated to make use of Jan 2023 PTEs and Jan 2024 PTEs, i.e., if these have different PTE distributions between local authorities.
3. For 2022-23, the 3- and 4-year-old entitlement average funding rate is made up from a Universal Hours average of £5.06 and an Additional Hours average of £4.98. Both these entitlements are funded on the same EYNFF funding rates at LA-level, but they have different PTE distributions between LAs, e.g., Universal Hours has a higher proportion of total PTEs in London LAs, which leads to different national averages. These figures are based on initial allocations.
4. For 2023-24, the 3- and 4-year-old entitlement average funding rate is made up from a Universal Hours average of £5.31 and an Additional Hours average of £5.23. Both these entitlements are funded on the same EYNFF funding rates at LA-level, but they have different PTE distributions between LAs, e.g., Universal Hours has a higher proportion of total PTEs in London LAs, which leads to different national averages. These figures are based on indicative allocations.
5. The 3- and 4-year-old average figures for 2022-23 do not include funding for the Teachers Pay Grant and Teachers Pension Employer Contributions (TPPG), which from 2023-24 has been included in the hourly rate.