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The Chancellor of the Exchequer Sajid Javid has pledged an extra £66 million for Early Years education.

The Chancellor’s Spending Round, announced yesterday in the House of Commons, promised the additional funding for maintained nurseries and other Early Years settings providing the Government’s funded hours.

It's not yet clear exactly how this money will be distributed or who will qualify for the additional funding.

But, the Treasury has said the money will be used to increase the hourly rate paid to providers for its funded childcare offer.

Of course the main issue is that the sum falls well below the predicted £662 million shortfall in funding for the sector.

Early Years organisations have responded by welcoming any extra funding, but warn it will not be sufficient to solve many of the sector’s financial problems.

Neil Leitch, chief executive of the Early Years Alliance said: “The Early Years sector has been holding its breath, waiting desperately for some reprieve from years of Government underfunding.

"While any extra money is welcome, the £66 million announced by the Chancellor of the Exchequer for early education will not make even the smallest inroad into bridging the £662 million funding gap in the sector.

"We are nearing a tipping point where parents will no longer be able to bear the increase in fees and optional extras that childcare providers are forced to charge to subsidise the funding shortfall.

"Many childcare providers have already reached that tipping point and have closed for good.

"Expect more childcare price hikes and more closures.”

Chief executive of PACEY Liz Bayram said: “With so many providers struggling with the low fees Government pays them to deliver 'free' early education places, the Chancellor’s announcement of an additional £66m from next year is a start.

"However the sector needs more, it is crying out for a long term investment strategy that ensures providers can deliver the high-quality places children and families deserve without risking their childcare businesses’ future sustainability.

"PACEY’s focus remains on working with the DfE and Treasury to ensure this acknowledgment that funding is too low is developed into sustained and full investment in the Government’s early education strategy.

"Only then will we start to see the disadvantage too many children still experience begin to reduce.”

Purnima Tanuku, chief executive of NDNA, added: “The Chancellor’s announcement of an additional £66 million of additional funding amounts to an increase of less than 2 per cent and we will have to wait and see how this will breakdown between regions and providers.”