DfE has issued slightly more detail about the planned uplift in the hourly rates for the current and new entitlements, following the announcements in the recent Budget.

• The national average rate for local authorities for 2-year olds will increase by 30% from the current national average rate of £6 per hour to around £8 per hour from September 2023.
• The national average 3- to 4-year-old rate for local authorities will rise in line with inflation from the current national average rate of £5.29 per hour to over £5.50 per hour from September 2023, as a result of the additional £204m announced in the budget. Details on the distribution of this to local authorities will be provided “in due course” – presumably before the summer holidays
• There is a further £288m to increase funding for the entitlements for 2024-25, the distribution of which will be announced in autumn 2023.

A recent ministerial response to a parliamentary question also confirmed that the expected rate for under 2s will be around £11.

The DfE’s calculations are predicated on assumptions about the relative cost of providing the different entitlements, linked to the different staffing ratios. We have challenged DfE’s assumption that the hourly funding rate for 3-/4-year-olds is viable if uprated in line with inflation, and will continue to work with our members to provide further evidence of the shortfall.