IFS annual education spending report reveals 9% real-terms funding fall for early years in 2022-23
by Jess Gibson
Government spending on the early years sector in 2022-23 has dropped by almost 9% in real terms, according to an annual report by the Institute for Fiscal Studies (IFS).
This overall funding decrease in the early years looks set to continue, with the report highlighting that government funding for the extended entitlement offers fails to account for the growing costs falling on settings and providers.
In addition, the IFS estimates that core resources per hour for three- and four-year-olds in 2024-25 will be 12% lower than in 2012-13 once providers鈥 costs are taken into account.
The report also found that, between 2017-18 and 2023-24, funding uplifts for children with additional needs fell 鈥 though this doesn鈥檛 include funding provisions for children with disabilities.
In addition, financial support for children for more disadvantaged backgrounds has also fallen over recent years, with Early Years Pupil Premium funding 鈥 allocated to deprived children in settings 鈥 decreasing by 2% in 2023-24 compared to 2017-18. Similarly, the proportion of local authority funding for deprived children has fallen from 60% in 2017-18 to 38% in 2023-24 鈥 a trend that the IFS attributes in part to an increase in 鈥渢he number of children classified as deprived鈥, though the report notes that 鈥渁 national funding formula where resource per disadvantaged child falls as deprivation rises seems particularly illogical鈥.
Commenting, Neil Leitch, CEO of the 无码天堂, said:鈥淭he government claims it has supported the sector to deliver the biggest early entitlement expansion in decades, but as today鈥檚 IFS annual education spending report shows, this could not be further from reality.鈥
鈥淒espite recent funding uplifts, existing government spending on early education continues to fall in real terms with hourly spending in 2022鈥23 nearly 9% lower than the previous year, making it near impossible for many settings to keep their doors open, never mind prepare for an influx of demand in a matter of months.鈥
鈥淲hat鈥檚 worse, this trend of below-par funding looks likely to continue when the extended entitlement offers roll out, with the IFS warning that government funding for the expansion entirely underestimates surging costs facing providers.鈥
鈥淚f the government had properly engaged with the sector and addressed existing funding gaps before it announced the expansion, this could have not only stemmed the number of setting closures but also enabled settings to increase their provision to meet the upcoming increase in demand. Instead, the sector is preparing for the start of the rollout while in the worst possible position.鈥
鈥淎s such, we urge the government to finally鈥痩isten to early years providers and鈥痗ommit to the investment needed to address the sector鈥檚 long-standing underfunding challenges and safeguard its鈥痜uture. Given that the expansion is fast approaching,鈥痶ime for meaningful action is running out.鈥濃