The Autumn Budget has been called a missed opportunity by the early years sector as the Chancellor took no measures to address the current funding shortfall or the business rates faced by providers.
To help small retailers struggling with the high-fixed costs of business rates, Chancellor Philip Hammond did announce that business rates will be cut by a third over two years for shops with a rateable value of £51,000 or less, but there are no similar measures for nurseries.
The Chancellor also announced a one-off £400 million bonus for schools to “buy the little extras they need”. This means primary schools will receive an average of £10,000 each and secondaries £50,000 each but there is no support on offer for the early years.
The National Living Wage is set to increase by 4.9% from £7.83 to £8.21 an hour from April 2019 and the National Minimum Wage will see an above inflation rise, which will result in increasing costs for providers.
Purnima Tanuku, Chief Executive of NDNA, described the budget as “a real kick in the teeth for the early years sector”. She said:
“The Government continually fails to address the impact of increases to minimum and living wages on the childcare sector. Instead of funding keeping up with above inflation wage increases we are seeing it stagnate and in some areas, it is going into reverse. From April the National Living Wage will rise to £8.21 an hour, a 4.9% increase which government funding simply doesn’t account for.
“The Chancellor’s forecast of 800,000 more jobs by 2023 is good news but only if people have childcare available that allows working parents to take up these jobs. While there was an extra £400 million for schools there was nothing announced for childcare providers despite the immediate pressures many are feeling.
“If the Chancellor can find almost a billion pounds to help small shops, restaurants and cafes and even more for public toilets he can find the money needed to give a real lifeline to nurseries. These are the settings that care for and educate our youngest children, allowing parents to return to work and yet they are being hit by the triple pain of chronic underfunding, rising costs and unfair taxes.”
Full details of the autumn 2018 budget can be found here.
Last reviewed 5 November 2018