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Please find a comment below from the Early Years Alliance following the publication of the Institute for Fiscal Studies' which has highlighted that despite early years funding increases in recent years, providers continue to be impacted by significant cost pressures, including the upcoming changes to employer National Insurance contributions. 

“The IFS is absolutely right to highlight that, despite increases in early years funding in recent years, ongoing and upcoming cost pressures – including changes to employer National Insurance contributions – are likely to increase the financial strain on early years providers. We’re clear that this, alongside the continued underfunding of three- and four-year-old places, will result in countless settings across the country struggling to meet demand this year and beyond.  

“What’s more, while national figures may suggest that there are enough places to meet parental demand under the entitlement expansion, as the report makes clear, the local picture is very different, with many regions reporting a mismatch between supply and demand and warning that the upcoming expansion of school-based provision is unlikely to go far enough to meet the local need for places.  

“Let’s be clear: while there’s no doubt that that recent increases in early years funding are a positive step, they are far from enough to offset years of underfunding and continued significant cost pressures. 

“Ultimately, if 2025 is truly going to be a year in which the early years is prioritised, government must put in place meaningful action to address the continued financial pressures on providers as soon as possible. Without this, it simply won’t be possible for settings to keep the promise government has made to families.”