Parents to save thousands in childcare costs thanks to new Government funding

Thousands of parents of two-year-olds across the country are getting help with their childcare costs as the first phase of the biggest-ever expansion in childcare starts.

In this first stage, working parents of two-year-olds are now able to access 15 hours a week of government-funded childcare from 1 April.

The rollout of support is part of the government's plan to help families – freeing thousands of couples from having to choose between having a family and a career, as over 150,000 children are on track to secure government-funded places from this week.

By September 2025 the full rollout will be completed, with working parents able to access 30 hours from the end of maternity leave to when their child starts school, saving parents an average of £6900 per year.

The Government has supported the sector to deliver this expansion by increasing the number of staff and places, introducing measures to boost the recruitment and retention of childminders, launching a major national recruitment campaign and providing over £400 million of additional investment to uplift funding rates in 2024-25. On top of this, the government will increase rates over the next two years by an estimated £500 million, the Chancellor confirmed at the Spring Budget.

The Government is confident that the childcare sector is ready to deliver the offer and make sure parents have the childcare they need. The government is paying a higher rate per place than parents would pay at the market rate for the new entitlements – as independently reported by the Institute for Fiscal Studies.

Prime Minister Rishi Sunak said:

“Last year we promised the biggest ever expansion in childcare provision this country has ever seen, and today we are delivering on our plan with 15 hours of free childcare for parents with 2-year-olds.

“We want to give working families the peace of mind that they will be supported and our full expansion will save parents £6900 a year – helping to build a brighter future for families and help to grow our economy.”

 Education Secretary Gillian Keegan said:

“This is a landmark moment, and I am extremely proud to see we're on track for more than 150,000 children to take up government-funded places under our new offer. This will be a lifeline for working parents, building up to this government's plan for the most comprehensive childcare support in this country's history by 2025.

“Support with childcare costs has an enormous ripple effect, freeing up parents to increase their hours at work and put more money in their pockets, or giving them the security to try out a new career or passion. It also contributes to economic growth and opens up new career opportunities in a hugely rewarding sector.”

The largest ever expansion in childcare is just one part of the government's long-term plan to give working families a brighter future. Businesses across the country have welcomed the historic expansion which will support them to grow.

Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:   

“When parents struggle to find a childcare solution, employers lose talented people from the workplace. That's damaging for people, business and the economy. The further rollout of free childcare in England is good news.  It will benefit parents and employers, as well as providing more great jobs and career opportunities in the childcare sector.    

“Helping more parents access high quality, affordable childcare will help firms recruit and retain skilled people and remove a significant barrier to work.  We need more capacity in the childcare system to help fill jobs in local economies and ensure individuals can progress in their careers.”   

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:

“The cost of childcare remains one of the biggest challenges to many parents, preventing many who wish to re-enter the workforce. As the largest private sector employer, we welcome the expansion of childcare provision that is being rolled out, and the support it will offer to many of our colleagues and potential colleagues, now and in the future.” 

Parents like Jennifer – who has been using two of the Government childcare support schemes to help her family with the costs of childcare – will benefit. Jennifer is already using tax-free childcare, and will now also start using the 15 hours of government-funded childcare for her two-year-old.

She said:

“If we didn't have the support, we'd have to reduce our working hours. When I went back to work, I stepped up into a promotion and started working more hours. Having access to this support made it financially sustainable to increase my hours.

“Lots of family members and friends will also benefit, and we can see already how it will help people feel less anxious about finances.”

Applications for the first stage of the rollout from April are now closed, but parents who have already registered can continue to take up places from April.

The number of parents taking up places is expected to continue to grow by tens of thousands over the coming weeks, and the government is expected to provide a formal update on take-up in the middle of April.

Chris McCandless, CEO, Busy Bees Europe, said:

“We welcome the Government's continued commitment to expanding support for early years education. The increase in funded hours will help working families and give more children the best start in life, and we're really pleased that the rollout has been accompanied by the clarity on future funding rates we needed to invest in creating the additional capacity required in our centres.

“We've already seen a significant increase in interest in our nursery places in recent months from parents looking to make use of the funded hours, and expect to welcome more children to our nurseries this year and in subsequent years as the scheme expands further.”

Jo Turley, Managing Director, Ashbourne Day Nurseries, said:

“At Ashbourne Day Nurseries, we welcome the extension of government funding in early years childcare and education as a positive step forward. Quality early years education is foundational in shaping a child's future, and we eagerly anticipate any benefits this extended funding will bring to families across our nurseries and the broader community.”

Justine Roberts, Founder and CEO of Mumsnet, said:

“By closing the gap in support between the end of maternity leave and a child's third birthday, the government will enable many women who would otherwise have been forced out of the workforce to choose to stay in work, benefitting not just them and their families but also the wider economy.”

All parents are being encouraged to check their eligibility at childcarechoices.gov.uk for the September phase of the rollout, and to act now to secure their place for September if they have a preferred provider.

ENDS

Notes to editors:

• When fully rolled out, the new offer is for 30 hours of government-funded childcare per week, the 38 weeks of term time.
• Applications will open for September on 12 May for parents of children aged 9-23 months old, and on 1 April for parents of 2, 3 and 4 year-olds. The government has been clear that no provider should set deadlines for September childcare codes earlier than 31 July 2024.
• At present, no local authorities are reporting that they are failing to meet their sufficiency duty, and every local authority has published their rates for 24/25 (April as well as September). This means that parents can be confident they will be able to secure a place within their local area.
• This comes as the government, in partnership with Childcare Works, has launched a new range of online resources for providers and local authorities, including guidance on ways to support provider sustainability and empower those looking to expand in their areas. This is the first set of a package of online support and national events that will be rolled out in the coming months. Local Authorities can access additional guidance and resources on how to support providers in their areas at [childcare works website]. 

SUPPORTIVE STATEMENTS:

Providers

• Clare Roberts OBE, Kids Planet CEO, said: “We welcome the expansion of the early years roll out and look forward to providing early years education and care to more families. “
• Iain Colledge, Executive Director of Operations, Bright Horizons, said: “Early years providers have maintained a close partnership with the Department for Education and other government departments to raise awareness of our sector's challenges and work together to find solutions. 

“Providing children with the best possible start in life is paramount, and a robust, sustainable early years sector, delivering high quality, affordable care to more children, is the most effective way to achieve this goal.

“We appreciate the government's recognition of the importance of early years, and we welcome the 2-year-old funding coming into effect from April. We are pleased that the persistence demonstrated by providers has resulted in driving progress in this area as sustainable funding rates and funding certainty are crucial for maintaining the health of the sector. 

“A standardised and more transparent approach at local authority level now needs to follow to ensure the process to receive rate increases is consistent across the country. There is a stark difference between systems and processes used by each local authority, often causing providers delays and unnecessary challenges in accessing funding.”

• Simone Carter, Chief Operating Officer, N Family Club, said: “At N Family Club, we welcome the enhanced funding offer and recognise the positive impact this will have on many children and their families. Making care more affordable will allow providers the opportunity to reach more families, and enable more children to experience the lifelong benefits of quality early years education. This really resonates with N Family Club's purpose to inspire the next generation, and our strong commitment to supporting parents in balancing their careers with family life.”
• Jo Turley, Managing Director, Ashbourne Day Nurseries, said: “At Ashbourne Day Nurseries, we welcome the extension of government funding in early years childcare and education as a positive step forward. Quality early years education is foundational in shaping a child's future, and we eagerly anticipate any benefits this extended funding will bring to families across our nurseries and the broader community.”
• Chris McCandless, CEO, Busy Bees Europe, said: “We welcome the Government's continued commitment to expanding support for early years education. The increase in funded hours will help working families and give more children the best start in life, and we're really pleased that the rollout has been accompanied by the clarity on future funding rates we needed to invest in creating the additional capacity required in our centres.
• “We've already seen a significant increase in interest in our nursery places in recent months from parents looking to make use of the funded hours, and expect to welcome more children to our nurseries this year and in subsequent years as the scheme expands further.”

Parent Groups

• Justine Roberts, Founder and CEO of Mumsnet, said: “By closing the gap in support between the end of maternity leave and a child's third birthday, the government will enable many women who would otherwise have been forced out of the workforce to choose to stay in work, benefitting not just them and their families but also the wider economy”.
• Jason Elsom, Chief Executive of Parentkind, said: “Getting childcare right will make a big difference to parents who tell us that affordability is big worry. Extending free childcare provision will help many parents balance work and family life. We need to support parents and children from the very beginning if we want to close attainment gaps and reduce the impact of poverty. Parents want high quality nursery places close to home which means making sure we have high quality nursery spaces available for parents when they need them.”
• Michelle Kennedy - Founder and CEO of Peanut, said: “At Peanut we hear about the challenges of juggling work and life that mums in our community face, but we also hear what a difference childcare support makes to their lives, so I welcome the news that even more help is available to alleviate that pressure. Anything that empowers more parents, especially mothers, to make that choice about going back to work and not feeling like the choice has been made for them is a positive step in the right direction.” 
• Jane van Zyl, CEO of Working Families, the UK's national charity for working parents and carers, said: "We welcome these changes, which have promise for helping families with the cost of childcare, and we're encouraged that childcare is now seen as a critical part of the economy. We are aware that many key organisations in this field are very concerned about inadequate funding for the sector. We look forward to further improvements making childcare widely available and accessible, and smoothing the system for administering funding, which will mean that these reforms are a step in the right direction to ensuring all working parents can access the childcare they need to support their families."

Business Groups

• Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said: “When parents struggle to find a childcare solution, employers lose talented people from the workplace. That's damaging for people, business and the economy. The further rollout of free childcare in England is good news.  It will benefit parents and employers, as well as providing more great jobs and career opportunities in the childcare sector.    
  “Helping more parents access high quality, affordable childcare will help firms recruit and retain skilled people and remove a significant barrier to work.  We need more capacity in the childcare system to help fill jobs in local economies and ensure individuals can progress in their careers.”   
• Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:“The cost of childcare remains one of the biggest challenges to many parents, preventing many who wish to re-enter the workforce. As the largest private sector employer, we welcome the expansion of childcare provision that is being rolled out, and the support it will offer to many of our colleagues and potential colleagues, now and in the future.” 
• Vickie Elsey, Greene King's People and Culture Director, said: “At Greene King, we strive to be a supportive employer which puts our team members first and allows them to work in a way which works best for them. We've heard firsthand from our teams that introducing these extra funded hours of childcare from the government will make a big difference in helping parents back to work and to move ahead with their careers. This increased flexibility will also complement support we already provide, such as our enhanced maternity policy and an industry-leading apprenticeship scheme.”
• Kate Nicholls, Chief Executive of UKHospitality, said: “Hospitality is one of the most flexible sectors in the economy - it's why we're the job of choice for so many parents who crave the ability to work variable hours. This expansion of Government-funded childcare will hopefully help thousands more parents back into work and enable those already in work to do more, if they so choose. I'm pleased the Government is acting to help parents, which in turn benefits businesses and the economy.”
• Alexandra Hall-Chen, Principal Policy Advisor for Sustainability, Skills and Employment at the Institute of Directors, said:  “Employees, employers, and the wider economy all benefit from ensuring that parents are able to access the appropriate support to be able to continue to work. 

“This expansion of government-funded childcare is therefore a welcome step in supporting parents to stay in the workforce, which is an essential component of tackling the persistent skills and labour shortages that UK businesses are facing.”