Budget supports high street businesses but not nurseries
Chancellor John Healey delivered his Budget today which promised breathing space for today and fresh hope for the future.
Despite promising to support businesses, there were business rates discounts for the high street, but this did not include nurseries.
Among the announcements relevant to the early years sector there were:
- Statutory minimum wages will all rise by 3.9% in April – https://ndna.org.uk/minimum-wage-increases-2026/
- Business rates relief frozen for high street businesses – increased the threshold for rate relief for small businesses from £12k to £18k – half of shops, restaurants and gyms to pay no business rates at all with others frozen in real terms for the next 2 years – nothing for nurseries
- From next year Mayors will receive 20% of business rates revenue locally with 100% devolution for business rates by the end of this decade
- Fuel duty cuts extended for motorists through to July next year
- Self-employed fathers and partners eligible for paid paternal leave
- Local apprenticeship service funded to support young people into apprenticeships locally
- Support for women-led scale-ups
Tim McLachlan, Chief Executive of National Day Nurseries Association (NDNA), said: “We are hugely disappointed to listen to this Budget which prioritises bars, salons and gyms over essential early education and childcare which enables those high street businesses to run.
“This Government is not offering any breathing space for nurseries – which are literally building children’s futures. Without radical change to support them their futures could be at risk.
“Private, voluntary and independent nurseries are delivering most of the Government-funded places yet 87% say their funding does not cover their costs with an average shortfall of £2.61 per child per hour. An above inflation increase to minimum wages needs to be matched with above inflation increases to funding rates.
“For years NDNA has been campaigning hard for nurseries to be given a discount on their business rates but sadly this has again been deliberately ignored. Nurseries are penalised with this unfair tax which was designed for warehouses and factories, not places where children learn, grow and develop.
“Nurseries with more space for their children have to pay the most tax, with the average bill now around £23,000. Nurseries have told us they could invest this money in their staff and resources to support children.
“Most nurseries are small or medium sized businesses who have been ignored by the Chancellor in this Budget. We strongly urge the Government to take another look at their business rates policy and give nurseries the breathing space they need and support they deserve. We will also want reassurances from the Department for Education that they will factor the 3.9% uplift in statutory wages into childcare funding rates.”
The Office for Budget Responsibility noted that the number of active users of the funded childcare offer was 17 per cent above the DfE target when the policy was originally budgeted in 2023. They confirmed that the DfE evaluation for this policy is expected in 2027.
- Budget
- England
- funding
- Scotland
- Wales
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