Campaigners, parents and the early-years sector in England have welcomed a major extension of state support for childcare costs, but warned that the plans would take years to come into effect and fail without sufficient funding.
In a move that was met with delight by parents but given a cautious welcome by campaigners, the chancellor, Jeremy Hunt, confirmed a £4bn expansion of free childcare for all preschool children from 2025, and announced “an ambition” for all state primaries to provide childcare before and after lessons from 2026.
As part of a wider drive to help people into work and boost growth, the plan will provide an extra 30 hours a week during term time to parents of children from the age of nine months to two years, matching the existing offering for three- and four-year-olds.
“I don’t want any parents with a child under five to be prevented from working if they want to, because it’s damaging to our economy and unfair mainly to women,” said Hunt, as he claimed the move would reduce childcare costs for families by nearly 60%.
Some parents were disappointed by the phased introduction of free hours, with one telling the Guardian: “For us, the news is disappointing [and] it doesn’t make a huge difference in terms of financial help right now. This definitely feels like a political play ahead of the election next year.”
The reform will be introduced in stages to ensure supply in the market, with working parents of two-year-olds able to access 15 hours of free care a week during term time from April 2024, while nine-month-olds would qualify for funding by September 2024. From 25 September, all working parents of under-fives would have access to 30 hours free childcare a week, the chancellor said.
However, some campaigners said the delaywas necessary to avoid overwhelming the sector .
An increase in the number of two-year-olds each adult can look after in a childcare setting from 1:4 to 1:5 was met with anger by campaigners, who argued it ignored their concerns and would increase pressure on overworked and poorly paid staff .
The chancellor promised more funding for the early-years sector, which has long argued that the amount providers receive from the government for the current free hours offer leaves them out of pocket. The funding gap has driven many providers out of business.
In an effort to prevent further nursery closures, Hunt promised an increase of free hours funding of £204m from this September, rising to £288m next year, which he claimed was a 30% rise. The Women’s Budget Group estimated that funding the current hours for three- and four-year-olds would cost an additional £1.82bn – far greater than the amount promised by the government
Appealing to parents with older children, Hunt said the government would also fund schools and local authorities to increase the availability of wraparound care for parents of school-age children, from 8am and 6pm. However, the change will not come into force until 2026.
The chancellor also confirmed that parents on universal credit can now get childcare costs paid upfront, while the amount they can claim back will rise to £951 and £1,630 for two children, an increase of almost 50%.
Addressing a “significant decline” in childminders, which he said had dropped by 9% in England in one year, Hunt said the government would pilot incentive payments of £600 for new childminders, rising to £1,200 for those who join through an agency.
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Keir Starmer accused the government of following Labour’s lead on pushing for childcare reform, adding that while “more money in the system” was a positive “as parents up and down the country know it’s no use having more free hours if you can’t access them, and it pushes up the costs for parents”.
Joeli Brearley, founder of the campaign group Pregnant Then Screwed, described the move as a “really significant moment”, but she warned that the £4bn investment was insufficient. Research from the Confederation of British Industry (CBI) estimates that fully funding the existing schemes for three- to four-year-olds and expanding the scheme to one- and two-year-olds would cost £8.9bn.
“The fact that childcare is the most important part of the budget announcement shows that the government is taking this seriously,” said Brearley. “We need to make sure there is enough funding, we need a workforce strategy – but I feel today was a big leap forward.”
Charities also warned about the shortage of supply in the sector. There are 2.4 children for every childcare place in England, and there has been a 19% decline in the number of providers since 2017, according to Labour analysis of government figures. A separate survey of local authorities in England by the children’s charity Coram found that only half had sufficient childcare places to meet the demand of parents working full time.
Neil Leitch, CEO of the Early Years Alliance, said the move was be a “game-changer” for families, but he also stressed that any “free” hours needed to be properly funded.
“We need to make sure that new investment supports the sector and improves the quality and availability of childcare for every child as well as making it affordable for parents,” he said.
He called government moves to push ahead with plans to relax ratios for two-year-olds from 1:4 to 1:5 – which Hunt said would be “optional” for provider – “shameful” and warned it would risk quality and increase pressure on educators with no benefit to parents.