The Chancellor has announced a £4bn expansion of free childcare to parents of all children aged under five from the moment parental leave ends.
The plan offers 30 hours a week of free childcare for all children aged between nine months and two years old, and will come into effect from 2025. This will expand the present system, which offers 30 hours of free childcare for three and four-year-olds. Jeremy Hunt said this would reduce childcare costs for families by nearly 60 per cent.
Announcing the changes in the Budget, Mr Hunt said the UK had one of the most expensive childcare systems in the world, adding: “For many women a career break becomes a career end”.
When will the support start?
The Chancellor said the support would apply to households where all adults were working at least 16 hours per week, although it would be introduced in stages because it was a “large reform”.
From April 2024, working parents of two-year-olds will be able to access 15 hours of free care, which will be extended to all children aged 9 months and older from September 2024.
The full package, of 30 hours of free childcare for every child aged between months and five years, will not become available until September 2025.
Mr Hunt said the 30-hour offer, when available, would start from “the moment maternity or paternity leave ends,” adding that it was a package “worth on average £6,500 pounds every year for a family with a two-year-old child using 35 hours of childcare every week”. He said it would reduce such a family’s childcare cost by nearly 60 per cent.
He added that he wanted to help those 700,000 parents claiming Universal Credit, who had limited requirements to look for work.
“Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare. So for any parents who are moving into work or want to increase their hours, we will pay their childcare costs upfront,” he said.
“And we will increase the maximum they can claim to £951 for one child and £1,630 for two children, an increase of almost 50 per cent.”
Funding for childcare sector
Mr Hunt also attempted to address the concerns of the childcare sector, after providers warned many would collapse as a result of rising cost pressures.
He announced an increase in funding paid to nurseries providing childcare, by £204m from this September, rising to £288 million pounds next year. “This is an average of a 30 per cent increase in the two-year-old rate this year, just as the sector has requested,” he said.
He also offered an incentive payment for childminders entering the industry – a £600 payment when they start working as a childminder and £1,200 for those who join with an agency.
The minimum staff to child ratio for England has also increased, from 1:4 to 1:5 children per staff member, bringing it in line with Scotland. Mr Hunt said this ratio remained optional and providers did not need to take this on.
‘Wraparound’ care gets a boost
Additional funding will also be made available to schools for “wraparound” care so all “school-age parents can drop their children off between 8am and 6pm”.
“One third of primary schools do not offer childcare at both ends of the school day, even though for many people a job requires availability throughout the working day,” Mr Hunt said.
He added: “To address this, we will fund schools and local authorities to increase supply of wraparound care so all school-age parents can drop their children off between 8am and 6pm.
“Our ambition is that all schools will start to offer a wraparound offer, either on their own or in partnership with other schools, by September 2026.”
