Flat funding rate amounts to serious cuts in nursery funding

The announcement by the Department for Education of the latest Early Years National Funding Rates has confirmed that rates will remain stagnant for 2019/20. Department for Education logo

This will be brought in from April, despite analysis of the Budget which shows increases to minimum wages, business rates burdens and funding shortfalls. This will leave the average nursery at least £42,000 worse off next year.

The announcement gives the figure which local authorities will receive per hour for every three and four year old, with councils having to publish the amount passed to providers by the start of the next financial year. The guidance published alongside these rates has confirmed that “Local authorities are required to pass at least 95% of their three and four year old funding from Government to early years providers.” 

Responding to the publication NDNA’s CEO, Purnima Tanuku OBE said, “These figures have confirmed what we feared, Ministers in the Department for Education are refusing to take account of the rising costs that this Government is putting on nurseries, putting small businesses at a huge risk. Inflation, increases in minimum wages, pension auto-enrolment and business rates all add up and are rising year on year. 
 
“Stagnant funding rates mean huge real-term deficits for cuts to nurseries who are delivering the Government’s childcare policies. Our analysis of last month’s Autumn Budget showed that, next year alone, the average nursery will be out of pocket by at least £42,000, a shortfall that could lead to bankruptcy. 
 
“This funding settlement will usher in another year of pain for the whole childcare sector. If Ministers can’t see the signs of stress for nurseries and other providers they must have their heads in the sand. The evidence is there for all to see, closures are up, available places are down and support for children with the greatest needs are being hit.”

See the latest Early Years National Funding Rates here
Funding rate comparison table - region
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