It is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) on securing a debate on this important subject at this important time. This Government are rolling out the largest childcare expansion in England’s history. By September 2025, we will be providing working parents with 30 hours of free childcare a week, from when their child is nine months old until they start school. By 2027-28, we will be spending in excess of £8 billion every year on free hours and early education, double the amount that we are currently spending.
Let me be clear at the outset that we are confident in the strength of the childcare market in the south-west, and I will explain why. I will start with funding rates, because that has been a strong theme in this debate. We regularly survey a nationally representative sample of over 10,000 childcare providers to gain detailed insights into how they run their provision and the costs they are facing. We also regularly survey over 6,000 parents to understand their use of childcare. We are working closely with local authorities, including all those in the south-west, to support them to deliver the early years expansion from April, when parents will be able to get the first 15 hours for their two-year-olds.
We regularly engage with every single local authority, and we have provided an additional £12 million this year to help them to meet the costs associated with this expansion. We have also appointed a local delivery partner that provides expert advice and support to help LAs with their childcare sufficiency duties. The hon. Member for Plymouth, Sutton and Devonport asked about support for local authorities. That partner, Hempsalls, physically goes to every local authority any time they are concerned about not having the number of places. It is Hempsalls’ job to work with them, as it has done in the past, to ensure that they have the places they need.
The 2024-25 Government hourly funding rates for all early years entitlements was renounced on 29 November. That was slightly later than originally planned because we wanted to incorporate the Government’s near 10% increase in the national living wage and provide additional funding to be able to incorporate that. We are in close contact with local authorities, and we do recognise the need to confirm the rates as early as possible. It has been the case that local authorities could do this until 31 March, and we have been pushing them to ensure that they do it as early as possible. Almost all have now committed to do so this month, rather than next month. As of 31 January, almost 50 had already published their final funding rates. Where they have not, they have usually provided indicative rates that then need confirmation, sometimes from school forums or their cabinet, depending on the local authority. We are confident that all providers will at least know their indicative local rates over the next couple of weeks.
I also announced on Friday that, to stop this happening again—because I have nothing but sympathy for providers waiting on their rates from local authorities—we will take further steps and introduce a window, likely to be a maximum of eight weeks, within which local authorities will have to confirm their rates once we have announced them. It is our intention for local authorities to have
eight weeks from whenever we announce the rates, and we are working with them on exactly what is required to enable them to do that.
It is the case, however, that we have given significant increases in the rates paid. To take Plymouth, the three and four-year-old rate has increased in the last couple of years from £4.95 to £5.65; the two-year-old rate has gone from £5.57 to £8.08; and for under twos, £11 will be the new rate. Those are significant increases in the rates paid and compare well with what many parents pay for provision privately.
The estimated number of registered childcare places in the south-west specifically increased by 3% between 2022 and 2023, from 128,782 to 132,981. That compares with a 1% increase in registered places across England as a whole, which we were pleased with, but it is even better that the south-west stands at 3%. The south-west also has a higher take-up rate of the entitlements compared with the national average. As of January 2023, take-up of our disadvantaged two-year-old entitlement was 78% in the south-west compared with 74% nationally. Take-up of the universal entitlement for three and four-year-olds was 95% in the south-west, compared with 94% nationally. Provision is high quality as well, because as of 31 December, 97% of early years-registered providers in the south-west region had a “good” or “outstanding” rating. That is in line with national averages, but the south-west had a slightly higher percentage of outstanding settings, at 15% compared with 14%. That is all good news.
Turning to recruitment, we need to grow the workforce as we roll this out over the next 18 months, so that we have the required places. That is why we phased the implementation of the new entitlements to make sure that providers could develop the capacity they needed. In the spring Budget, we announced an additional £288 million for 2024-25 and £204 million for 2023-24 to fund the new early years and childcare entitlements. That is in addition to the £400 million we announced in November, in part to incorporate the new increase in the national living wage.
There have been some suggestions of difficulties in achieving sufficient places nationally. Our annual survey of childcare and early years providers showed that the total number of paid staff in England increased by 4% between 2022 and 2023. We also had a 15,100 increase in places. Those positive figures are lost in a lot of the stories I see and a lot of the speeches I have heard today. I do not underestimate the challenges of the roll-out, but we feel confident in it, because we are pulling every lever we can and are already seeing positive progress on those headline figures.
To support the sector to recruit, on Friday we launched a new national campaign, “Do something BIG. Work with small children”. The campaign shines a light on the great careers available in the sector and recognises the lifelong impact that childcare professionals have on children during their most formative years. It will run across TV, cinema, social media, online, radio and billboard advertising. There is also a new website to help people find out more about gaining qualifications, search for existing vacancies and consider the different types of roles available. Part of the campaign also involves the piloting of financial incentives. In 20 local authorities, eligible joiners and returners can receive a tax and national insurance-free payment of up to £1,000 shortly after they take up their post.
On retention, we all know it is important not just to recruit but to retain staff. As well as significant uplifts to the rates and the increase in funding to meet the national living wage increase, we are working closely with providers to ensure meaningful career development and professional support for people in the sector. As I have said, I am open to any ideas that providers have about what we can do, in addition to what we have done to the early years foundation stage and so on, to make it easier for them to hire and keep the staff they need.
A number of Members raised important points about children with special educational needs. Just this morning I met with Dingley’s Promise again, which does great work in that area. We are working closely with local authorities to make sure there are places for children with SEND. We increased the early years pupil premium to the equivalent of £388 per eligible child per year to support better outcomes for disadvantaged children. Funding for the disability access fund, which is an additional payment to help to make reasonable adjustments within the provision to support eligible children with a disability, is increasing to £910 per eligible child per year.
There are around 60,000 different providers in the early years sector, largely made up of private, voluntary and independent organisations, which set their own rates of pay. We are providing additional funding to help with entitlements, giving more opportunities to increase staff pay and ensuring a phased implementation to allow the market to develop the capacity it needs. In October, we announced a series of changes to the early years foundation stage to make it easier for providers, based on things they told us they would like to see.
My hon. Friend the Member for Torbay (Kevin Foster) was right that it is important to look at this by local authority, not by region, and that is exactly what we are doing. He is right that we want to have a choice of provision. There are interesting things going on in the early years market. For example, there has been at least a 20-year decline in the number of childminders, based on the choices that parents are making and so on. He is absolutely right that different parents want different things. In our recruitment strategy, we are trying a range of different things. We have early years bootcamps to support apprenticeships. We will hold a consultation on what more we can do to get more childminders into the sector, and we already have a childminder grant scheme to support parents to have choice wherever possible.
My hon. Friend the Member for Torbay asked about family hubs. I have been to family hubs that have nurseries within them. It is the central aim of family hubs to provide whatever services families need. That will include advising people on their childcare options. If there are any points I have not covered, I will write to my hon. Friend or other Members.
I want to leave the hon. Member for Plymouth, Sutton and Devonport a couple of minutes to wind up, so I will conclude. I thank him for securing this important debate. As my hon. Friend the Member for Torbay alluded to, the Government are delivering the latest and largest expansion of childcare. Once completed, it will help families with one of the biggest cost pressures they are facing today, saving working families up to £6,500 a year and helping an estimated 1.5 million people to
increase the number of hours they work. I look forward to working with Members present to deliver this transformative expansion.
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