Early years funding rates for 2024-25 still fall short for 3- and 4-year-olds

The Department for Education have today announced the funding rates which will apply from April 2024, including for the new entitlements launching from that date.  They have also published the response to the consultation on the new funding rates.

National average funding rates from April 2024 will be:

  • £11.22 for under 2s (from September 2024)
  • £8.28 for the 2-year-old entitlements (under the previous formula, the disadvantaged 2-year-old rate was £7.95 in Sept and £6.00 in April 2023)
  • £5.88 for 3-/4-year-old entitlements (up from £5.62 in Sept 2023 and £5.29 in Apr 23)
  • £5.27 MNS supplementary funding (up from £4.63 in Sept and £4.39 in Apr 2023) including the Teachers’ Pay & Pension Grant
  • £0.68 hourly rate for EYPP (up from £0.66 in Sept, £0.62 in Apr 2023)
  • £910 yearly rate for DAF (up from £881 in Sept, £828 in Apr 2023)

DfE have published an “easy explainer” of the funding rates and full details of the local authority allocations and guidance.

2-year-olds – local authorities can choose whether to pay the same rate for both the disadvantaged 2-year-old entitlement and the entitlement for 2-year-olds with eligible working parents.  If they set different rates, the disadvantaged 2-year-old rate must not be lower than the working parents rate.

EYPP, DAF and SENIF are all extended to apply to cover all age groups. 

Settings will need to apply for EYPP for eligible disadvantaged 2-year-olds on top of the hourly funding rate, and the criteria for the two funding streams should align in respect of economic criteria, but not necessarily in respect of other criteria for eligibility for the disadvantaged 2-year-old entitlement.

The 3-/4-year-old funding rates are subject to a minimum funding floor of £5.47, a year-to-year protection set at 1% and a gains cap set at 5%.  Teachers’ Pay and Pension grant funding is added on after year-to-year protection and gains cap are applied.

Applications for new childminder grants open on 30 November

From 30 November, new childminders can apply for grants of £600 if registering with Ofsted or £1200 if registering with a Childminder Agency.  Registration must be completed between 15 March 2023 and 15 March 2025 to be eligible, including for returning childminders whose registration lapsed more than 12 months previously.  Applications must be made within two months of completing a registration.

Parents can apply for codes for April 2024 from 2 January

Working parents wishing to apply for a code for the new entitlement for their 2-year-old from April 2024 will be able to apply online from 2 January.  Government is recommending applying between mid-January and the end of February. 

Early Education Chief Executive, Beatrice Merrick, said:

“The funding rates announced today for 2024-25 will be vital to the success or failure of the expanded entitlements.  While we welcome the new rates for 2-year-olds and children aged 9 months to one year, we are concerned that the funding rates for 3- and 4-year-olds, who take up the bulk of provision and therefore determine the viability of the entire sector, are only increasing in line with inflation.  It is well documented that this funding rate is well below the actual costs of delivery, and as a result primary schools have to cross-subsidise from other budgets and maintained nursery schools are pushed further into deficit, while PVIs increase parent-paid fees and additional charges.  This is another missed opportunity for government to put in place realistic levels of funding to support its pledge to parents to deliver an expansion of funded places.  The sector cannot run on goodwill and warm words: the real cost of delivery needs to be funded by government.”

Further reading

Become a member

For more articles and professional learning

Find out more

Browse Early Education publications