I strongly believe that early years are crucial to giving every child the best start in life. I therefore welcome the doubling of free childcare for working parents of three- and four-year-olds and the introduction of tax-free childcare. More than one million disadvantaged two-year-olds have also benefited from 15 hours of free childcare since it was introduced.

In order to realise this ambitious expansion, a fairer funding system for early years providers was introduced in 2017. The previous system had been based on historic expenditure, leading to significant variations in funding for local authorities. The new Early Years National Funding Formula is ensuring funding is allocated fairly, transparently and on a sustainable basis.

I am also encouraged that 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. Early years settings will continue to benefit from the £3.6 billion that was allocated to early education entitlements in 2020-21.

At the 2020 Spending Review, the Chancellor announced a £44 million investment in early years education for 2021-22. Further, I am encouraged that the Department for Education has committed to providing £208 million in new funding for early years by 2024-25. This will include £170 million by 2024-25 to increase the hourly rate to be paid to early years providers, to deliver the Government's free hours offers, which builds on the £44 million increase confirmed at the last Spending Review. It will also provide £18 million in 2024-25 to create a network of family hubs to improve access to services for families and £20 million for parenting support. The Department has also reaffirmed £150 million for the training of early years staff to support children's learning and development, as part of the £1.4 billion announced in June 2021 to help children catch up on lost learning. 

I know the Government recognises that maintained nursery schools are an important part of the early years sector and provide valuable services to disadvantaged children.

The commitment to the long-term funding of maintained nursery schools, made in October 2019, is unchanged. Ministers secured a continuation of around £60 million of supplementary funding for them in the financial year 2021-22. Ministers are considering how to provide maintained nursery schools with a long-term picture of their funding.

Attendance at early years settings may have been lower than usual levels both before and after Christmas 2020, which will have caused issues in the early years sector. Ministers wanted to move forward with the early years census as it provides important and useful information. However, I welcome that Ministers have looked into different approaches of how to support the early years sector and how funding will work this year. 

Local authorities who can show that they have seen a rise in attendance since the January 2021 census will receive top-up funding during the spring term. This funding includes the offers for two- year-olds, three- and four-year-olds Universal Hours and 30 hours offer, maintained nursery schools supplementary funding, and Early Years Pupil Premium. 

Top-up funding will be capped at 85 per cent of January 2020 census levels. In cases where local authorities saw attendance levels exceed beyond this cap at the January 2021 census week, payment will be made for that recorded attendance in full. I understand that further guidance for local authorities, setting out details as to how the 85 per cent top-up scheme works, together with information on our approach for finding the summer term 2021, will be shared soon. 

I understand that the approach to funding early years will be temporarily changed over the coming financial year. Local authorities will be funded for the 2021 summer and autumn terms based on their attendance data for each respective term. Authorities already collect attendance data for local funding purposes. It is welcome that these changes will offer early years providers reassurance that funding to authorities for entitlements will be in line with the most up to date data. 

These changes have created a fairer system that better provides the affordable and high-quality childcare needed to give children all over the country the best opportunity to reach their full potential.