I agree that early years are crucial to giving children the best possible start in life, and therefore it is important that the sector is properly funded and supported, especially during this pandemic.
A fairer, more transparent, and more sustainable funding system for early years providers was introduced in 2017, in order to realise the introduction of tax-free childcare and the doubling of free childcare for the working parents of three and four year olds.
Moreover, in April 2020, all local authorities saw an increase to the hourly funding rates for two-year-olds and an increase in the vast majority of areas for three and four-year-olds. Ministers are planning to spend over £3.6 billion in 2020-21 on the early education entitlements. For 2021-22, the Government has announced a £44 million investment that will pay for an hourly rate increase that will more than cover the additional costs nurseries might face from the forthcoming increase in the national living wage.
I know that this pandemic is a difficult time for the early years sector, and I am pleased, therefore, that ministers have worked with the Treasury on a package of support for nurseries, pre-schools and childminders during this period. I would also encourage all eligible early years settings to make use of pandemic-related business support schemes, such as the business rates holiday and business interruption loans. Ministers have also indicated that they will be looking at different approaches of how to support the early years sector and how funding will be working this year.