Early years funding is likely to fall in real terms by 8% to 2024, according to the Institute for Fiscal Studies.
In a new report, the think tank warns that while the early years budget is due to rise in the coming years to £3.75 billion a year, that increase will be partially wiped out by soaring inflation.
The funding, which covers the 15 hours entitlement to early education and childcare for all three and four-year-olds – as well as 30 hours for the children of working parents, will likely be squeezed as childcare providers’ costs also rise.
The study, which was funded by the Nuffield Foundation, found that the rising costs for childcare providers will mean that the total funding for the free entitlement will shrink by 8% by 2024–25 compared to 2021–22.
