NICs debated in Parliament: “different treatment” for maintained nurseries highlighted
The Department for Education has published how it will deliver £25 million of additional funding to help schools with early years provision and publicly maintained settings. The funding for 2025/26 is to support those settings with NICs costs relating to both teachers and support staff costs associated with the increase to NICs.
The NICs grant will provide additional funding in respect of early years provision for the following EY settings:
- schools (both maintained and academies)
- governor-run academies and maintained nursery schools
- all other maintained nursery schools
Responding to the guidance Purnima Tanuku CBE, Chief Executive of NDNA said: “Once again we are seeing the different treatment of maintained settings, compared with how the Government treats private and voluntary run nurseries.
“We know that the Government is going to be purchasing around 80% of the hours in settings from September but has put all the additional costs of NICs onto providers. If your biggest customer is not paying a fair price it puts a lot of pressure on the rest of your nursery.
“We have worked with MPs to lobby for an exemption for nurseries as they are more exposed to these changes as 75% of their operating costs is staffing. While the Employment Allowance clarification is helpful, it won’t offset the additional costs that most providers in the sector will face.”
In Parliament on Wednesday 19 March MPs debated the final stage of the National Insurance legislation.
NDNA has briefed MPs at every stage of the debate to provide evidence of the pressures this change will put on early years settings. We had secured a number of amendments to exempt nurseries alongside social care providers but the Government has rejected these changes to the legislation.
Members of the All Party Parliamentary Group for Early Education and Childcare spoke in the debate. Dame Caroline Dineage MP said, “Early years providers are facing a squeeze that many just will not be able to stomach. Just as care settings have their revenue dictated by local government, nurseries are limited by childcare ratios and the fees they get from their local authority for their 30 hours’ free childcare. Hopscotch nursery, which looks after 1,900 children across my region, has told me that these changes will add £1 million to its overheads. It says that, in order to make up the shortfall, it is going to have to put its fees up by 10%, and that 10% will be passed on to my Gosport constituents.”
APPG Chair, James MacCleary MP said, “I will move on to nurseries and early years providers, an issue very close to my heart. In my constituency, they are facing the same impossible squeeze. The rise in national insurance contributions, combined with the increased statutory wage costs, is pushing many to the very brink. The National Day Nurseries Association has warned that the average nursery will see an additional £47,000 in costs, which the Government’s funding increase does not come even close to covering. If nurseries are forced to close, it will leave working parents, who are already struggling with the cost of living, without the childcare they need. If schools are exempt from this tax hike, as they should be, the nurseries that provide the very foundation of a child’s education should be, too. Finally, Sarah Dyke MP raised the concerns of NDNA member Acorn Day nursery who has recently spoken to ITV about their concerns.
The MP said, “The measure will disproportionately impact businesses run by women. For example, early years provider Acorn Day Nursery in Somerton has told me that it believes that the employer national insurance contribution increases, in combination with other recent funding announcements, could be the final nail in the coffin for its business, leaving families without crucial early years care provision.”
- childcare
- early education
- early years
- NDNA
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