The early years sector is set to receive a £2bn funding boost next year as the final phase of the mass expansion of free childcare is delivered.

The Department for Education (DfE) has announced a 45% increase to the early years pupil premium, which it said was ‘the largest ever’ uplift in rates.

It will also provide £75m in grant funding to help childcare providers deliver the 35,000 extra staff and 70,000 new places it forecasts will be needed in September 2025, when working parents of children from nine months old to school age will be offered 30 hours of weekly free childcare.

This extra funding, combined with next year’s government-funded hourly entitlement rates, mean a £2bn increase in early years spending, bringing it to £8bn, the DfE said.

But a report warned this week that the Government’s expansion of free childcare risked not delivering for poorer families.

Research by the Institute for Public Policy Research (IPPR) and Save the Children found that among the poorest fifth of parents with young children in England, only 36% used formal childcare, compared to 73% of the highest earning households.

The report also found that access to childcare within a reasonable travel time varied significantly by local authority.

The most deprived areas had 32% fewer places per child compared to the most affluent areas, while rural areas were found to have 31% fewer places than inner cities and town centres.

IPPR associate fellow Jodie Reed said: ‘The extension of funded childcare entitlements currently under way is unprecedented.

‘But our analysis shows that if the Government doesn’t think differently about the delivery, it could leave the poorest children and families far behind.’

The report advised 'reinvigorating' the role of local authorities, including by councils pooling funding to secure new childcare in the areas of greatest need.