Today (10 December) the Department for Education (DfE) has announced new funding rates for April 2025/26 as follows:
- Under twos: £11.54 (a 3.4% increase compared to current rate)
- Two year olds: £8.53 (a 3.3% increase)
- Three and four year olds: £6.12 (a 4.1% increase)
Uplift in funding
The DfE has also announced it is moving to a 96% “pass through” rate for local authorities, up from the current rate of 95%. This is the proportion of funding that local authorities must pass on to providers in their area. Local authorities are expected to announce their individual funding rates by 28 February 2025 at the latest.
The DfE says the increase in rates will support with increases to national minimum wage and living costs. While schools and maintained nurseries will be reimbursed for National Insurance Contributions (NICs) this support is not extended to PVI settings.
£100 million additional spending
The DfE also announced an additional £100m for the early years sector:
- £75m “expansion grant” funding to support providers to deliver the upcoming expansion of funded childcare and early education next September. All provider types, including childminders, will be eligible for this grant. Details on how this will be distributed through local authorities is expected in early 2025.
- £25m to increase the Early Years Pupil Premium from 68p to £1 per hour. This is a 45% increase – the largest increase since the EYPP was introduced.
