For many parents, being able to afford good-quality childcare is essential to working and supporting their families. The Government allocated over £3.6 billion for early years entitlements in 2020/21 to assist parents with their childcare costs and to ensure that all children have access to a quality early education. Further, last year, the Government announced an additional £44 million investment for 2021-22 for local authorities to increase hourly rates paid to childcare providers.
I know the universal 15 hours' free childcare for all three and four-year-olds and the additional 15 hours for eligible working parents of three and four-year-olds has helped many parents obtain more secure employment, enhanced their career opportunities and improved their work-life balance. Moreover, parents in receipt of certain benefits may be eligible for 15 hours of free childcare and early education a week for two-year-old children.
The tax-free childcare scheme is also intended to support working parents with their childcare costs. If you use an approved childcare provider who is signed up to the scheme, there is a tax-free childcare scheme where existing childcare fees are topped-up to help support parents in work. I am pleased that the Government will pay £2 for every £8 paid to your childcare provider via an online childcare account.
Working parents on a low income may also be eligible for help with up to 85 per cent of their childcare costs through Universal Credit childcare. This is subject to a monthly limit of £646 for one child or £1108 for two or more children, payable in arrears.
Ministers plan to invest up to £1 billion over three years to create more high-quality wraparound and holiday childcare places from 2021. Further details on this significant new investment will be announced in due course.
Although I was unable to attend the 13th September Westminster Hall debate on childcare, I understand the importance of this issue and I will engage with ministerial colleagues to convey the strength of feeling on these matters.