CABINET STATEMENT: Childcare Offer for Wales - hourly rate review

This morning by Julie Morgan MS, Deputy Minister for Social Services announced that the hourly rate for childcare through the Offer will be increasing from £4.50 per hour to £5 per hour from April.

In the statement, the Minister reinforces Welsh Government's commitment to supporting working families with the costs of childcare. Read the statement in full below

Childcare Offer for Wales

We are committed to supporting working families with the costs of childcare. Our Childcare Offer for Wales provides up to 30 hours of government-funded early education and childcare for children aged three and four, whose parents are in work, for 48 weeks a year.

The Childcare Offer is continuing to expand, in terms of the number of families accessing the Offer and the number of childcare settings offering spaces.

It is important childcare providers are paid a sustainable rate under the Childcare Offer. Research, published in November 2021, found the Childcare Offer has had a positive effect on profitability for more than two-thirds of childcare providers, but there have been calls to review the hourly rate paid for childcare through the Offer, particularly in certain parts of Wales.

Following a review of the hourly rate, I am announcing an additional £6m in funding per year to support an 11% increase in the hourly rate, raising it from the current £4.50 per hour to £5 per hour from April. We will also be providing additional funding of £1.5m to support the continued alignment of the Foundation Phase nursery and childcare funding rates under the Childcare Offer and an additional £3.5m investment in Flying Start childcare.

This increase will help provide greater sustainability across the childcare sector in Wales, ensuring working parents can continue to benefit from the Childcare Offer. It will also enable the continued provision of high-quality care and education, giving children the very best start in life. To support this, I have also committed to review the rate at least every three years.

In addition to an increase in the hourly rate paid for childcare, the maximum amount settings can charge for food will also increase from £7.50 to £9 a day, reflecting the increase in both food prices and utility and energy prices.

This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do that.


Welsh Government 22.02.22


Early Years Wales is pleased to support the decision made by Welsh Government to announce a rise in the rate to be paid to providers delivering the Childcare Offer for Wales. We are pleased that the recent engagement with the sector by Welsh Government, and views shared from our members by Early Years Wales and Cwlwm partners have been reflected on and acted upon to increase the funding to providers. The challenges faced by the sector during the pandemic and in light of increasing costs for food and utilities had left significant pressures on budgets; this Childcare Offer rate increase will support the sector to continue to provide quality childcare. It is a positive intervention from Welsh Government at a time when the sector has been concerned about economic sustainability in the short and medium-term.

We look forward to continuing to work with Welsh Government in support of plans announced in the cooperative agreement for Government relating to the childcare sector in the coming months, and thank the Deputy Minister for Social Services and Welsh Government for reviewing the Childcare Offer Funding and making this announcement and positive step today.

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