Local authority funding rates for 2023 confirmed
By Rachel Lawler
The Department for Education (DfE) has announced the local authority funding rates for 2023/24, including a £20 million overall increase intended to reflect the pending increase in the National Living and Minimum Wages.
Funding rates for frontline providers have not yet been confirmed and will be published by individual local authorities, most likely in the New Year.
However, the DfE has confirmed the funding rates that local authorities will receive as of April 2023 for the two- three- and four-year-old early entitlements. You can view a full list of individual local authority funding rates for 2023/24 .
Consultation response
The DfE has also responded to a recent consultation on early years funding formula changes, which launched earlier this year.
The consultation response, which is available , confirms that the DfE is implementing a number of changes to the early years national funding formula in line with the original consultation proposals. This includes:
- Year-to-year protections: The DfE has confirmed that all local authorities will see a funding increase of no less than 1% for both three- and four-year-old, and two-year-old, funding.
- Minimum funding floor: In addition, the DfE will be applying a minimum hourly funding rate (called a minimum funding floor) of £4.87 for three- and four-year-old funding, up from the current £4.61.
- Gains cap: To pay for the year-to-year protections, the DfE is proposing to introduce a gains cap (i.e. a limit on how much a local authority’s funding can increase by) of 4.9% for three- and four-year-old funding and 10% for two-year-old funding.
Commenting on today's announcement, Alliance CEO Neil Leitch said: "The early years is in crisis. What our sector needs is a comprehensive long-term strategy underpinned by substantial investment. What we are getting is the equivalent of rearranging the deckchairs on the Titanic.
"Nurseries, pre-schools and childminding settings are dealing with the consequences of years of government underfunding, alongside soaring energy prices, sky-high inflation rates and record increases in the national living and minimum wage. And yet, average funding increases of no more than 4% will amount to pennies in practice - and a few extra pennies on an already-wholly insufficient funding rate isn't going to stop prices going up for parents, or more and more settings being forced to close their doors for good.
"When it came to schools, the Chancellor rightly recognised that what the government had committed to at the last Spending Review was not enough to tackle the financial challenges that the sector is currently facing, and took urgent steps to address this through a £2.3 billion boost in funding. So why should the early years be any different?
"The government knows full well that early years funding is nowhere near what it needs to be to safeguard the future of the sector. What will it take for ministers to stop pretending otherwise and actually do something about it?"
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