The government have announced a 'childcare revolution' introducing 30 hours of free childcare for children from the age of nine months. But most of the reforms won't kick in until April 2024 at the earliest.
The Chancellor Jeremy Hunt said his childcare reform plans were 'the most significant improvements in a decade' adding: 'I don’t want any parent with a child under 5 to be prevented from working if they want to because it’s damaging for our economy and unfair on women.'
The announcement that the government's 30 hours offering, which currently is for children the term after they turn three, would now run from the end of maternity or paternity leave - at nine months - was surrounded by a series of other reforms which the Chancellor said he hoped would bring at least one million more women back into work.
The government will provide childcare settings with £204million from September 2023 and £288million from September 2024 to help fund the current three-year-old offering.
Campaigners had raised fears that the Chancellor would change ratios in childcare settings, claiming it endangers children. Hunt announced ratios for two year olds would go from 1:4 to 1:5, but would be optional.
The government also announced bursaries of £600 to those becoming childminders.
Those on Universal Credit will now be paid upfront instead of in arrears and will see the amount they can claim per child rise by 50 per cent to £951 for one child and £1,630 for two children.
What did the Budget say about school wrap-around care?
The Chancellor said he would provide funding with the ambition that all schools could provide wrap-around care from 8am to 6pm by September 2026.
When could free childcare for one and two-year-olds start?
The Chancellor says that 30 hours free childcare for all children under five will be available from September 2025. Hunt said that to ensure they didn't crash the sector, the offering would be introduced in stages.
Two year olds will get 15 hours of free childcare from April 2024. From September 2024, 15 hours of free childcare will be extended to all children from nine months. Then from September 2025, every working parent of under fives will have access to 30 free hours.
Mr Hunt estimated that the increased hours could save some families as much as £6,000 per year.
How will the free childcare for one and two-year-olds work? Am I eligible for 30 hours free?
While the details are not clear, currently children can claim 30 free hours of childcare from the start of the term after they turn three years old. It's not confirmed whether the offering or childcare for one and two year olds would follow the same pattern.
The 30-hours offering is available to parents who work and earn above a certain threshold, and as long as neither parent earns more than £100,000. Again, it's not clear if the government will follow that pattern.
There's more information on the current 30-hours free childcare offering on the government's website, here.
What do campaigners make of the Chancellor's budget and childcare reforms?
Joeli Brearley, CEO and Founder of Pregnant Then Screwed comments said that while attention on childcare was welcomed, there were still concerns.
'Just three years ago, we would talk to Ministers about childcare and they would look at us like we were speaking Klingon,' se said. 'It was of no interest to those in power. To go from there to childcare being the main event in the Spring budget shows the power of collective action and we are elated to hear that the childcare sector will now receive a significant investment.
'Parents of young children felt ignored, but this will restore their faith in democracy so we thank Minsters for hearing our cry and bridging the gap for mothers from the end of maternity leave so that they are supported to be able to work.
'However, we are concerned that the money pledged is not enough to reduce costs for parents sustainably. It is imperative that there is a clear and remunerated strategy to attract more educators into the sector, to retain those workers and to offer progression opportunities. Without a workforce plan providers will continue to be forced to close, and increasing ratios will be detrimental to staff retention, what they need is better pay which will come from significant investment into the sector and into the roll out of the free hours scheme.
'The CBI estimates that to do what the government is planning costs £8.9 billion not £4 billion, so we need to see the detail as to how this money is being distributed and we need to know that the government is investing in these new schemes based on the actual cost to deliver them. Free childcare from 9 months is brilliant, but only if there are childcare settings to be able to access this care, without the correct funding there won't be.'
Neil Leitch, CEO of the Early Years Alliance raised concerns for the sector, saying: 'While the Chancellor claims to be building a "childcare system comparable to the best", the news that early years settings will only receive an initial increase in funding of £204m for the three- and four-year-olds completely flies in the face of this rhetoric.
'With the shortfall for current two-, three- and four-year-old offer estimated at around £1.8bn based on government's own figures, the additional funding announced today is highly unlikely to match what's needed to put providers on a steady footing, and raises serious questions about the government's entire approach to costing this policy.
'We know from bitter experience that expansions of so-called 'free childcare' without adequate investment are a recipe from utter disaster – and given that many providers rely on fees from younger children to make up for current funding shortfalls, the impact on the sector if the government gets this wrong cannot be underestimated.
'And while today's announcement will no doubt be effective at driving up the demand for early years places, it's far less clear how ministers intend to ensure adequate supply. At a time when settings are closing at record levels and early educators are leaving the sector in their droves, unless the proper infrastructure is put in place by the time the extended offers are rolled out, many parents of younger children expecting funded places to be readily available to them are likely to be left sorely disappointed – and the token offer to new childminders announced today is likely to do little to change this.
'What's more, while much has been said about the role of this policy in supporting parents back to work, we've yet to hear anything about the need to ensure any places being provided to children are of high quality. Early years settings don't just deliver 'childcare'; they provide vital early education, and yet this seems to have been completely overlooked in discussions - as demonstrated by the government's shameful decision to relax ratios despite almost universal opposition from both parents and providers.
'Ultimately what matters how what was promised to parents today is implemented in practice. From what has been announced so far, we are far from convinced.'
The Children’s Commissioner for England Dame Rachel de Souza said: 'Parents want childcare that is high-quality and loving, so their children can thrive, and children need parents who aren’t dealing with the stress of unaffordable and inflexible childcare.
'The measures outlined in the Budget offer the prospect of a lifeline to families with younger children who have been struggling with this balance, especially those on Universal Credit who previously had to pay large childcare costs up front.
'I’m particularly pleased to see plans to boost childminder numbers and to make better use of schools to expand childcare provision, both recommendations I made last year. Schools sit at the heart of their communities, with facilities that are trusted by children, and can help meet the challenge of increasing rent or mortgage payments faced by many private providers.
'I urge the Government to deliver these proposals as quickly as possible to benefit children and families who need this support now, and in a way that maintains quality of care. I look forward to engaging closely with these plans in detail as they emerge.'
What does relaxing ratios mean?
The government's announcement that they'll reduce ratios has worried campaigners. Neil Leitch said: 'It is utterly appalling that the government has pushed ahead with this decision, and the fact that it has done so without even bothering to respond to the official consultation launched several months ago is an insult to the sector and an insult to families.
'Yes, parents want affordable care and education, but they also want to ensure that their children are in safe environments receiving quality care and education - something this policy completely flies in the face of.
'We have a cohort of children still recovering from the effects of the pandemic. We have an overwhelmed and overburden workforce already leaving in their droves. How can anyone in government have possibly looked at this policy and thought: 'Yes, this is the way forward'?
'In their focus on growth and boosting the economy, ministers have forgotten that we have a responsibility to our youngest children: to ensure that they all, without exception, get the best possible start in life. It is a shameful decision, and one we will continue to fight to oppose.'
What's going on with tax-free childcare?
Tax-free childcare is a different scheme to the 30 free hours scheme, but is dealt with in the same government portal. The tax-free scheme allows parents to pay childcare providers via a government account and receive top-ups from the government. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider, up to £500 a quarter, so £2,000 a year.
There were rumours that the government might fund some of their childcare changes by axing tax-free childcare, but there was no mention of this in the Chancellor's budget.
How much does childcare cost?
A recent report found that the average childcare cost has increased to almost £15,000 a year. However, regular submissions to our regular series The Childcare Juggle found parents paying much more -and using flexible working and family help to try and supplement what they couldn't afford.
The Chancellor is thought to have previously thought such a huge investment in childcare was too expensive, but was convinced of the boost to the economy.
Pregnant Then Screwed recently found that three quarters of mother who use formal childcare say it does not make financial sense for them to work.
The survey also found that 1 in 4 parents (26%) who use formal childcare, say that the cost is now more than 75% of their take home pay. Depressingly, 1 in 3 (32%) parents who use formal childcare say they had to rely on some form of debt to cover childcare costs.
Last week the Centre For Progressive Policy calculatedthat if mums could work these desired hours, it would result in at least £9.4bn in additional earnings per year. The wider impact to the economy would be upwards of £27bn per year, or approximately 1% of UK GDP.
The Coram survey this month revealed a sharp drop in childcare availability across England over the past year, with only half of local areas reporting sufficient childcare for children under two, a decrease of 7% on 2022, and under half (48%) reporting enough childcare for parents working full-time, a decrease of 11% on last year.