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<p>By 2019-20 we will be spending around £6 billion on childcare support – a record
amount. This includes around £1 billion extra per year to deliver 30 hours of free
childcare and fund the increase in hourly rates that we introduced in April 2017.</p><p>Our
average funding rates are based on the department’s ‘Review of Childcare Costs’ which
was described as “thorough and wide ranging” by the National Audit Office. The review
looked at both current and future cost pressures.</p><p>We continue to monitor delivery
costs and have recently commissioned new research to provide us with further robust
and detailed data of the costs of delivering childcare for under five-year-olds using
a representative sample of early years providers.</p><p>In terms of the rate of the
National Living Wage, the independent Low Pay Commission makes recommendations taking
in to account the state of the economy and evidence from a wide range of business
and workers representatives.</p><p> </p>
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