The government has pledged £300m to improve funding for early years providers as it looks to roll out plans to double free childcare to 30 hours a week.
The Spending Review outlined that the money would be used to increase the average hourly rate paid to childcare providers. It also announced that £50m in capital funding would be allocated to create additional places.
Nicky Morgan said that across the board rates will be £4.88 an hour for three- and four-year-olds and £5.39 for two-year-olds, adding that this amounted to an increase of 30p an hour.
She said: “With this increase we have set a level of funding that providers need to provide high-quality childcare, while at the same time providing good value to the taxpayer.”
Neil Leitch, chief executive of the Pre-school Learning Alliance said the extra funding was “an important first step towards addressing this historic issue”. However, he is concerned that providers may miss out through uneven distribution by councils, and that the new rate includes early years pupil premium money.
“Given that this is currently additional funding available only to children from disadvantaged backgrounds who meet very specific criteria, we are unclear as to why this money has been factored into the general three- and four-year-old rate,” Leitch said.