One of NDNA’s campaign objectives is to make nurseries exempt from business rates.
Making business rates for nurseries exempt would save settings an average of £21,000 a year and would also benefit voluntary sector providers who are currently eligible for reliefs of 80% of their business rates bills.
NDNA renews call for business rates relief for nurseries in England
NDNA renews call for business rates relief for nurseries in England
Following an announcement in Parliament that pubs will receive a 15% cut to new business rates bills from April followed by a two-year real-terms freeze, NDNA has called on more support for nurseries.
Nurseries in England currently pay full business rates which can be refunded for school based settings. After the last revaluation in 2023, NDNA found that the average nursery has an annual bill of £21,034 per year.
NDNA are supporting the petition to abolish business rates for nurseries. Sign it here.
Tim McLachlan, Chief Executive of National Day Nurseries Association (NDNA) said: “Following the Treasury’s announcement in Parliament today to discount business rates for pubs by a further 15%, we call on the Chancellor to extend similar relief to nurseries. Efforts to help pubs should be followed by measures to support private and voluntary nurseries across England that are the bedrock of government-funded hours, supporting working families and the economy.
“Our latest research shows that the average nursery has to find £21,000 for business rates, an unfair tax that penalises nurseries with more space for children to grow, development and learn in. This is a crippling cost, especially when we know that 76% of our nurseries operate at a loss or only just break even.
“With the revaluation, we know that most bills will increase from April. We know of members whose rateable value has shot up by more than 40% and higher.
“There is no government funding to help nurseries meet this cost, whereas schools and academies which also run nurseries can claim it back. With the Government buying around 80% of all childcare hours, nurseries cannot pass this cost onto parents in the form of fees and we fear that many will be unable to continue their work.
“Nurseries in Wales and Scotland have been exempt from paying business rates for many years now as they are seen as a social good, delivering their governments’ early education ambitions.
“The IFS in its annual report on education spending evidenced a 22% drop in real terms of the childcare funding rate for three and four-year-olds because of spiralling costs. The Government must pay a fair hourly rate to providers and treat all types of provider the same by exempting all childcare settings from the scourge of business rates.”
NDNA believes that business rates are an unfair tax created for factories, shops, and warehouses and are based on space. This approach unfairly penalises nursery businesses, who have to offer good-sized rooms including outdoor areas for their children to play in, grow, explore and develop.
Nurseries end up paying more for the environment they provide children, and can be discouraged from investing or expanding by fear of higher rates.
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We have heard that due to revaluations and the end of some local authority discount schemes nursery business are facing big increases in business rates bills.
Nationally, we have taken this to the Chancellor and officials at the Treasury to request an urgent review. At the same time, there is a national petition on exempting nurseries that you can add your voice to.
To support you in raising this with your own MP, we have developed a template letter which you can use, adding your own information and business rates bill, to ask them to raise this issue with the Chancellor on your behalf as well.