More than a million families are already benefiting from 15 hours a week of free childcare for three and four-year-olds, alongside 160,000 two year olds. However, the chancellor announced in the Autumn Statement that by 2019-20, the government will spend over £6bn a year supporting parents with their childcare costs. 

This includes doubling the free childcare entitlement from 15 hours to 30 hours a week for working families with three and four-year-olds from September 2017, worth up to £5,000 per child.

Furthermore, he announced plans to introduce tax-free childcare from early 2017, providing up to £2,000 a year per child. This, according to Osborne, means that a family with two children can begin to claim childcare support worth up to £40,000 through free hours and tax-free childcare by the time both children are at school. 

Osborne said: “We will maintain the free childcare we offer to the most disadvantaged two year olds. And to support nurseries delivering more free places for parents, we’ll increase the funding for the sector by £300m. Taken together that’s a £6bn childcare commitment to the working families of Britain.” 

The Autumn Statement and Spending Review sets an upper income limit per parent of £100,000 and a minimum weekly income level per parent equivalent to 16 hours (worked at the National Living Wage) to the extended free childcare entitlement and tax-free childcare. It was claimed that this would save £215m by 2020-21. 

The government has also undertaken a review of the cost of childcare provision, and from 2017-18 will invest £300m to increase the average hourly rate childcare providers receive, and at least £50m of capital funding to create additional places in nurseries.

“This will be delivered alongside the introduction of a national early years funding formula and other reforms, to ensure funding is fairly allocated,” the review claimed.

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