NDNA respond to Chancellor’s Spring Budget

All children over the age of nine months will be entitled to 30 hours of funded childcare, the Chancellor announced in his Budget today in a bid to get more parents into the workforce.

An additional £204m will be invested in September to increase the current hourly funding rate for the existing 30 hours scheme for three and four-year-olds. 

He also said that ratios for two-year-olds would be relaxed so that one adult could care for five children, despite the fact that parents and providers were keen for this not to go ahead because it wasn’t in children’s best interests. However, it will be optional for providers.

Jeremy Hunt’s package for childcare reform include:

  • Increased funding to childcare providers by £204m from September 2023 then £288m next year which the Chancellor said would be an average increase of 30% for two-year-old rate
  • Loosening of ratios for two-year-olds to 1:5 but providers not under any obligation to do this
  • Funded 15 hours of childcare for twos from April 2024; 15 hours for children over nine months old from September 2024; 30 hours of childcare for all children from nine months to school age from September 2025
  • Universal Credit childcare payments will be made up front instead of in arrears
  • The cap on Universal Credit childcare payments will be lifted from £646 a month to £951 for one child and £1630 for 2 children
  • Childminders will receive £600 to join and £1200 if join via an agency
  • The Government will provide £289 million in start-up funding to enable schools and local authorities to test options to increase the availability of wraparound childcare in the longer term, with national roll out over academic years 2024-25 and 2025-26

There will be further details to come as Government Departments look at how these will be implemented.

Purnima Tanuku OBE, Chief Executive of NDNA, said: “Following the Chancellor’s announcement of 30 hours of childcare for all children of working parents under three, it will take a huge amount of careful planning to ensure the policy will work.

“Firstly we will need to see if the uplift in funding for providers promised from September this year is enough to cover all providers increasing costs and stabilise the early years sector which is currently in crisis. We need to see how this will translate into rates paid to providers and halt the high numbers of nursery and childminder businesses closing.

“Costs rise sharply for nurseries from April with a 14% increase in staff wages along with other energy and business rates burdens, so we are extremely concerned whether nurseries can continue operating sustainably without any increase in funding until September. For some nurseries who have already closed, it’s too late.

“Any expansion in the current offer cannot happen overnight, but we hope a year is long enough to get solid foundations in place for the 30 hour policy for all two-year-olds. The Government must therefore work closely with the sector on clear, effective plans to tackle the workforce pressures they are currently facing.

“Parents and providers categorically said no to any changes in ratios in a recent government consultation because it was not in their best interests and would not save any costs. Early years staff know their children best and they will take a professional judgement based on their experience.”

CEO Purnima appeared before the Budget announcement on Newsnight, BBC News, the Jeremy Vine Show on C5 and gave interviews to various national newspapers, C5 news, Sky News and ITN.

On changes to Universal Credit, Purnima added: “The Chancellors’ plans to improve the Universal Credit childcare payments is really welcome. NDNA has been fighting for this reform for years because parents and providers have told us that the complexities of the system can be a real barrier to parents taking up work and children being able to access high quality early education places.

“We have given evidence to various Parliamentary inquiries and supported a legal challenge to the upfront payments system, so it’s a relief that the Chancellor has finally listened.”

Read the full speech here

Here is all the detail behind the Budget

NDNA is the membership association for day nurseries. Thanks to the support of our members, we are able to give them a stronger voice on issues that affect their businesses and the children they educate. Find out more about NDNA membership here.

  • England
  • Adult:Child Ratios
  • Budget 2023
  • Jeremy Hunt

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