The chancellor is expected to announce a £4bn expansion of free childcare in England to cover one-year-olds and two-year-olds when he unveils his Budget later today, but advocacy groups say the measures risk driving some nurseries out of business.
Jeremy Hunt’s plan comes as part of “a wider drive to help people into work and boost growth”, said The Guardian. Currently parents of children aged three and four are entitled to 15 or 30 free hours of childcare a week for 38 weeks of the year, starting from the term after their child turns three. This is set to be extended to parents of children aged one and two.
Equivalent funding is expected to be announced for Wales, Scotland and Northern Ireland.
Zoe Haimovitch, from HR firm HiBob, told City A.M. the impact “will be enormous” and “welcome news to working mothers”. And Pregnant Then Screwed, a charity that promotes the rights of pregnant women and mothers, said it was “elated to see the Government is now considering investing £4 billion in childcare”. However, it tweeted: “From previous experience we know that the treasury doesn’t give anything, without taking something. The devil is in the detail.”
According to Politico, the chancellor is tipped to move from 1:4 to 1:5 staffing ratios for two-year-olds, as well as “offer £500 sign-on bonuses to new childcare workers; and fund more wraparound childcare in schools”.
Neil Leitch of the Early Years Alliance told Radio 4’s The World Tonight that the plans could “spell disaster” and force “considerably more” nurseries to close without proper funding. The Early Years Alliance, which represents around 14,000 childcare providers in England, has previously expressed concerns about any relaxation of ratios, which it said risks “severely compromising the safety and quality of care” and would place increased pressure on the workforce during “a severe staffing crisis”.
The Guardian’s £4bn estimate for how much the proposal will cost is also dramatically short of the price tag suggested by the Confederation of British Industry (CBI), said Labour MP Stella Creasy. With the CBI putting the cost of measures at more like £8.9bn, Creasy declared the plan “as economically illiterate as Help to Buy”.
The Financial Times said the Treasury will “increase the funding nurseries receive for the free hours, addressing the concerns of providers, which insist the amount they receive per hour falls far short of their costs”.
The Treasury is not formally commenting ahead of the Budget.