Spending review: Chancellor announces £66m for early years

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Chancellor Sajid Javid has announced an increase of £66m in early years funding in his first spending review.


Chancellor Sajid Javid gave his speech on the spending review in the House of Commons

The money will be used to increase the hourly rate paid to childcare providers for funded childcare.

Speaking in Parliament to announce the spending review, the Chancellor said, ‘The Government will also increase early years spending by £66m to increase the hourly rate that’s being paid at maintained nursery schools and other childcare providers that deliver on the Government’s free childcare offer.’

The Department for Education confirmed to Nursery World that the funding increase will be applied to both the universal 15 hours and 30-hour childcare for working parents and that more detail will be provided in the next few days.

The Chancellor confirmed a three-year spending plan for education, including for schools, which had already been announced last week.

Mr Javid, said, ‘A good school, inspirational teachers, are the most effective engine for social mobility that there is. That’s why today we are delivering on our pledge to increase school spending by £7.1bn by 2022-23.

‘And we’ll provide over £700m more to support children and young people with special educational needs next year – an 11 per cent increase compared to last year.’

The increase in funding means that every secondary school will be allocated a minimum of £5,000 per pupil by 2020-21, and every primary school £4,000 per pupil by 2021-22.

Further education colleges will also receive 400 million to train and teach more than a million 16 to 19-year olds, he said.

Mr Javid also announced that he would be asking the Department for Culture, Media and Sport to develop proposals for a youth investment fund to pay for more youth centres.


Early years organisations and unions said that while more funding for early years was  welcome it was inadequate when nurseries had been underfunded for years, and warned that more nurseries would close.

Neil Leitch, chief executive of the Early Years Alliance said, ‘The early years sector has been holding its breath, waiting desperately for some reprieve from years of government underfunding. While any extra money is welcome, the £66 million announced by the Chancellor of the Exchequer for early education will not make even the smallest inroad into bridging the £662 million funding gap in the sector.

He added, ’We are nearing a tipping point where parents will no longer be able to bear the increase in fees and optional extras that childcare providers are forced to charge to subsidise the funding shortfall. Many childcare providers have already reached that tipping point and have closed for good. On today’s news, expect more childcare price hikes and more closures.’

Cheryl Hadland, managing director of Tops Day Nurseries said, ‘This £66m doesn’t even keep up with inflation, nor will it remotely keep up with the 5 per cent increase in minimum wage due in April 2020. £4 may go up to £4.07 per hour, depending on the local authority top slice.
‘Net result, very sadly this is another body blow for the nursery sector, who will only be able to award minimum pay increases to dedicated, caring and professional staff. 

‘It’s a blow too for the parents who will need to make up the existing difference plus this wider difference as well. I find this extremely disappointing, and it confirms that the current Government still do not understand the importance of investment in the early years.’

Purnima Tanuku, chief executive of NDNA said, 'For three years providers have faced stagnating funding rates to deliver the Government’s childcare policy so any announcement of plans to increase the rate will be welcomed. However, the devil will be in the detail.

'The Chancellor’s announcement of an additional £66 million of additional funding amounts to an increase of less than 2 per cent and we will have to wait and see how this will breakdown between regions and providers.'

NDNA said they hoped that some of the £700 million funding for children with SEND would be allocated to early years.'

Professional Association of Childcare and Early Years (PACEY) chief executive, Liz Bayram said, ‘With so many providers struggling with the low fees government pays them to deliver “free” early education places, the Chancellor’s announcement today of an additional £66m from next year is a start.

‘However the sector needs more, it is crying out for a long term investment strategy that ensures providers can deliver the high-quality places children and families deserve without risking their childcare businesses’ future sustainability.’

Kevin Courtney, joint general secretary of the National Education Union, said, ’£66m for early years funding is wholly inadequate. The Government needs to invest £300m to restore cuts to early years provision in order to stop providers having to close down. There is still no money mentioned for maintained nurseries that face closure from next August.

On school funding he said, ‘As a result of tireless campaigning by the National Education Union alongside other unions and campaigners, we have won a major shift in Government policy on school funding. Voters, however, should not be fooled. Today's funding commitments for primary and secondary schools, SEND, 16-19 education and teacher pay go some way towards closing the gap, but are still significantly short of what is required.

‘The sums announced today will not reverse all the cuts made to date. We have seen class sizes rise, teaching assistants sacked, and teachers having to scrape together resources just to get by.’

Paul Whiteman, general secretary of NAHT, said, ‘Now we’ve heard directly from the Chancellor, it feels like NAHT’s initial cautious welcome is still the right one.
‘Importantly, we’ve won the argument that the Treasury needed to come up with new money. That’s a big win and a testament to the campaign efforts of heads, school staff, parents and governors who have all made their voices heard loud and clear. Those people deserve enormous credit for what they have achieved.

He added, ‘The announcement of £7.1bn will go some way to restoring the real-terms cuts we’ve seen in education since 2010 but will not chalk it all off. Schools in more affluent areas appear to benefit most, so we’ll have to look at that carefully.
‘An additional £66m for early years education is welcome, although we know that sector needs more, so that’s an area where we’ll have to keep pushing. The same is true for pupils with SEND and for students in FE and sixth form colleges.’

Director of policy and campaigns at Action for Children, Imran Hussain, said, ‘Far from a decade of renewal as the Chancellor promised, we’re heading for a decade of crisis for children.
‘By failing to fix the funding gap in children’s services today, the Chancellor has left our most vulnerable children without the right support - facing traumas like abuse and neglect while struggling to get the early help they need. More children reaching crisis point also means more pressure on our over-stretched nurses, teachers and police officers.

‘The only way to tackle this country’s growing crisis in childhood is for the Government to invest in our children’s services on a long term and sustainable basis. It can do this by establishing a National Childhood Strategy so the Prime Minister can get a grip on these issues, backed with funding for urgently needed services to keep children safe from harm.’

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