Local authority childcare funding rates to remain largely unchanged

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The early years sector has expressed further concern over the financial sustainability of settings as new figures reveal stagnant funding rates for most local authorities next year.


Under the EYNFF, 13 local authorities will see their funding fall for 2019-2020

The newly released Early Years National Funding Formula (EYNFF) rates for 2019-2020 reveal that just two local authorities in England will see their funding to deliver 15- and 30-hour childcare increase next year.

In over 100 local authorities funding rates will remain the same as 2018-19 and in 13 councils, providers will experience a drop in funding.

According to the figures, published by the Department for Education, the London borough of Hounslow is one of two local authorities that will see its funding increase. It will rise by 21p on this year's rate, bringing it to £5.91 per hour.

Nursery World approached Hounslow council for a comment, but did not receieve a response.

The London borough of Richmond upon Thames will also see an increase to its rate, from £5.61 this year to £5.69 in 2019-2020, a rise of 8p.

In contrast, the 13 local authorities where funding rates will fall by a maximum of 2p per hour next year are:

  • Derbyshire
  • Rutland
  • Camden
  • Islington
  • Lambeth
  • Southwark
  • Tower Hamlets
  • Westminster
  • Sunderland
  • Halton
  • Ealing
  • Bristol City
  • Bradford

In the remaining local authorities, rates will stay the same as this year.

The funding rate that providers will receive next year is not yet known, but local authorities must pass on at least 95 per cent of their funding.

Sector response

The Pre-school Learning Alliance called the new funding rates ‘irresponsible’.

Chief executive Neil Leitch said, ‘In the face of rising costs and, in particular, next year’s minimum wage increase, the Government is asking providers to do the impossible: deliver the same quality service with less resource. It would be an unsustainable approach in any sector, but given how vital the early years is to children's long-term learning and development, to do so for this sector is downright irresponsible.

‘We’ve had plenty of studies from various organisations, independent researchers, even the Government itself, which clearly show that childcare in this country is grossly underfunded, and that this underfunding is leading to increased parent fees and, in the worst cases, provider closures. It’s now a matter of urgency that the Government recognises that and commits to both increasing and annually reviewing funding levels.’

The National Day Nurseries raised the same concerns.

Chief executive Purnima Tanuku said, ‘These figures have confirmed what we feared, ministers in the Department for Education are refusing to take account of the rising costs that this Government is putting on nurseries, putting small businesses at a huge risk.

‘Stagnant funding rates mean huge real-term deficits for cuts to nurseries who are delivering the Government’s childcare policies. Our analysis of last month’s Autumn Budget showed that, next year alone, the average nursery will be out of pocket by at least £42,000, a shortfall that could lead to bankruptcy.

‘This funding settlement will usher in another year of pain for the whole childcare sector. If ministers can’t see the signs of stress for nurseries and other providers, they must have their heads in the sand.The evidence is there for all to see, closures are up, available places are down and support for children with the greatest needs are being hit.’

  • The EYNFF fundng rates for 2019-to-2020 are available here
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