Chancellor’s spending review plans for the future, but sector needs investment now
Today, Chancellor Rachel Reeves delivered her Spending Review, setting out budgets for all government departments over the next few years. She begun by stating:
“We are renewing Britain – but I know that too many people in too many parts of our country are yet to feel it.”
It was anticipated that the Chancellor would boost spending in the NHS, housing and defence and during her speech said she wanted to invest in security, health and grow the economy. While rejecting “austerity” she confirmed total departmental spending will grow by 2.3% over inflation per year.
Purnima Tanuku CBE, Executive Chair of National Day Nurseries Association (NDNA) said: “The Chancellor announced huge amounts of investment across all government departments but many of these will take time to support the economy. Money invested now in a child’s early years make a big difference immediately – children’s outcomes are improved, there is less need for later costly interventions and the economy is boosted by parental employment. But 15% of parents have quit their jobs due to the high cost of childcare because the government contribution is still too low.”
During her spending review statement, Rachel Reeves announced the following:
Early years and schools:
• Free school meals will be extended to half a million more children, lifting 100 thousand children out of poverty
• Continuing national roll-out of breakfast clubs for every child
• £370m for school-based nurseries as part of the government’s Plan for Change commitment to ensure a record number of children are school ready
• Additional funding core schools budget with investment rising to £3.2 bn to fix crumbling classrooms and £2.4bn to rebuild 500 schools
• By 2028/29 the Government will be spending £1.6bn more on funded entitlements.
Commenting further on the Chancellor’s announcement Purnima said: “While there appears to be a yearly increase in funding for the childcare expansion, we need to know how much money is actually passed onto providers. Historically funding has never kept pace with rising costs, so we will be closely scrutinising the impact of funding rates on nursery sustainability.
“We have already seen examples of how well-established, high quality nurseries have been kicked out of their premises by newly-created school-based nurseries using public money. Further investment in school-based nurseries should not result in continued displacement of existing provision. Our recent research shows that it would make better financial sense for the Government to invest in supporting the workforce to unlock more childcare places rather than creating new settings.
“The vast majority of funded places are delivered by private, voluntary and independent nurseries. But this significant sector is not operating on a level playing field with school nurseries which don’t pay business rates, will be reimbursed for National Insurance Contributions and where children are given free school meals. There must not be a two tier system where children in school nurseries are favoured over and above those in PVI nurseries.
“We welcome the increased investment in supporting children with Special Educational Needs and Disabilities but support needs to be put in place much earlier to be most effective.”
During the Chancellor’s speech additional announcements were made including:
Business support:
• To champion small businesses seeking access to finance – boosting British Business Bank overall financial capacity to £25.6m
Education and training:
• Record investment in training and upskilling £1.2bn by the end of spending review period supporting young people with training and apprenticeships
Devolution settlement:
• £52bn for Scotland by end 2029
• £23bn for Wales by end 2029
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