Autumn Statement: no additional support for nursery sector
Chancellor Jeremy Hunt gave his Autumn Statement in Parliament today announcing no sector-specific support for nursery businesses.
From April 2023, the National Living Wage is set to rise again by 9.7%, with minimum wage for 21 and 22 year olds increasing by 10.9%.
The education budget will increase by £2.3bn but there was no mention of the Government’s investment in childcare.
There will be transitional support for businesses to transition to the new revaluation rates that come into force from April 2023. The Chancellor announced that the 50% business rates discount that retail, hospitality and leisure businesses have been benefiting from will increase to 75%. He did not mention any specific support for the childcare sector.
An announcement will be made later this year on businesses who will be given support with energy bills from April onwards.
Purnima Tanuku OBE, Chief Executive of National Day Nurseries Association (NDNA) said: “Today’s Autumn Statement yet again demonstrates how this Government does not value the future of our youngest children. The Chancellor announced no additional support to the early years sector, despite the IFS reporting an 8% real terms gap between funding rates and soaring costs.
“Childcare businesses were already suffering from years of underfunding.
“With the statutory wage increasing around 10% next year, providers will have to find ways to increase pay with no corresponding increase to their funding. Since the 30 hours policy was brought in from 2017, minimum wages have risen by 39% but lowest funding rates have only been uplifted by 7%. With no additional funding announced for 2023/34 this amounts to a big cut in real terms.
“The announcement of additional funding for schools demonstrates that this Government does not value the importance of early education or understand that investment made at this crucial stage of a child’s life reaps benefits for years to come. This demonstrates a lack of respect for the amazing work that early years educators do day in, day out to support children and families.
“Investing in children’s early education and care is the best time to improve their outcomes and by the time they start school it can be too late to catch up. There is a total lack of equity in investment and recognition when it comes to early education and schools.
“NDNA has been plotting nursery closures and has seen an increase in the rate of closures compared with last year. The economy needs people to work but if there is insufficient childcare available, this will impact all other sectors. The childcare sector is absolutely vital to boosting our economy.
“With the business rate relief announced it is clear the Chancellor values pubs over childcare. This is a false economy as it could push more nurseries into closing their doors, leaving fewer parents able to work.
“From April, nursery businesses will see their rates revalued and most likely increase. Currently this unfair tax adds an additional £13,260 to running costs, exacerbating the recruitment and retention crisis in early years.
“On energy rates we have been clear that childcare settings, which look after our youngest children, should be seen as vulnerable, especially when Government funding is not keeping up with costs. Any support for businesses after April next year must include childcare providers.”
New National Living and Minimum Wages are as follows:
National Living Wage (NLW) and National Minimum Wage (NMW) 2023 Up-rating – Following the recommendations of the independent Low Pay Commission (LPC), the government will increase the NLW for individuals aged 23 and over by 9.7% to £10.42 an hour from 1 April 2023. Also:
- Increasing the rate for 21-22 year olds by 10.9% to £10.18 an hour;
- Increasing the rate for 18-20 year olds by 9.7% to £7.49 an hour;
- Increasing the rate for 16-17 year olds by 9.7% to £5.28 an hour;
- Increasing the apprentice rate by 9.7% to £5.28 an hour; and
- Increasing the accommodation offset rate by 4.6% to £9.10 an hour
- business rates
- Jeremy Hunt
- Low Pay Commission
- National Living Wage
- National Minimum Wage