Wales funding rates revealed but 20% increase will not cover all costs
The Welsh Government has published the new funding rates for the Childcare Offer today (11 December) following the Budget.
This rate has been £5 an hour per child since 2022 but has only just been reviewed after years of lobbying by NDNA Cymru.
The new rate will rise from April 2025 by £1 to £6 per hour per three and four-year-old child.
In addition, the Government has committed to reviewing the rate each year and has also announced that the exemption from business rates will continue permanently. NDNA is calling for the Welsh Government to give providers additional support to help them to pay the National Insurance Contribution increases and increased salary costs or this cost will be passed onto parents.
Purnima Tanuku OBE Chief Executive of National Day Nurseries Association (NDNA) Cymru said: “Until now the Welsh Government had not reviewed the Childcare Offer rate for three years, despite our lobbying, while delivery costs soared.
“So while we welcome their commitment to reviewing this rate annually, and the permanent removal of business rates for nurseries, an uplift of 20% in the funding rate for the Childcare Offer is not high enough to cover these soaring costs for providers. These measures alone will not support the ongoing sustainability of the childcare sector.
“The childcare sector is facing planned increases in National Insurance Contributions and statutory salary increases from April 2025. Together these will add an additional £2,600 per employee or £23,700 for the average full daycare provider in Wales, based on nine employees. This is an 11% increase in their staffing bill alone before you take into account other cost rises.
“We would urge the Welsh Government to work with Cwlwm partners to look at other ways that additional support could be provided to help the sustainability of the childcare sector, especially with the final phase of the Flying Start expansion taking place shortly. This includes reimbursing nursery businesses for the National Insurance Contributions.
“There is a real need to look at how changes to ‘Childcare Offer for Wales: guidance for local authorities’ could provide more flexibility to ensure that all types of childcare providers can remain sustainable and continue to provide high quality childcare and play opportunities for children across Wales.”
- Wales
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