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Chancellor reveals Budget 2023 boost for parents with seven childcare changes
PARENTS could be hundreds of pounds better off a year after the Government announced a raft of changes to the childcare system.
Chancellor Jeremy Hunt revealed seven changes today as part of his Spring Budget.
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Speaking in the House of Commons, he said:
- the number of kids per staff member in nurseries will rise from four to five, but the changes will be optional
- nurseries will receive more funding
- parents on Universal Credit will have childcare costs paid by the government up front
- the maximum amount families on Universal Credit can claim for childcare will be increased by hundreds of pounds
- people who take a childminder job will receive £600 while agency workers who take a childminder job will receive £1,200 as part of a pilot scheme
- schools will receive more funding to provide wraparound childcare
- 30 hours free childcare will be extended to parents with children aged between nine months and two years old
Free childcare
Mr Hunt announced some parents with children aged nine months to two-years-old will receive free childcare.
But the help will only be offered to households where all adults are working at least 16 hours.
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From April 2024, working parents of two-year-olds will be able to access 15 hours of free childcare per week.
This will be extended to working parents of nine-month-olds to two-year-olds from September 2024.
From September 2025, all eligible working parents of children aged nine months up to three years will be able to access 30 hours of free childcare a week.
Spring Budget at a glance
- Millions of households will save £160 after the Energy Price guarantee was extended
- Cigarette prices will rise after the government hiked tobacco tax
- Drivers won’t pay more for fuel as duty was frozen and a 5p cut will continue in a huge win for The Sun’s campaign to keep it low
- The lifetime allowance on pensions will be axed and the annual allowance will increase
- The government will give councils £500m to fix potholes
- Millions of energy customers on prepayment meters will no longer pay more
- Jeremy Hunt unveiled 12 low-tax investment zones across the country
- Alcohol duty on beer in pubs will be cut, saving 11p per pint - but tax on wine and spirits will increase
- The Chancellor confirmed that benefits will rise next month
- Corporation tax will rise to 25% next month
- The government will extend free childcare to 30 hours for one and two-year-olds
- Working parents on Universal Credit will get more for childcare and costs covered straight away
Changes at nurseries
The Government will uplift the hourly funding rate paid to providers to cover the cost of extra free childcare for parents.
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It said this will help providers to manage cost pressures as well as raise the quality of provision.
In total, the Government will give providers £204million in 2023-24 and £288million in 2024-25.
The Government also said staff-to-child ratios at nurseries will change.
For two-year-olds in England, there will be one member of staff for every five children as opposed to four, from September 2023.
Meanwhile, the Government said it will be offering new childminders a £600 bonus through a pilot scheme while those going through an agency will receive £1,200.
Wraparound childcare
The Government will launch a new wraparound scheme to help primary school-aged children in England access care in school between 8am and 6pm.
The Government will provide £289million to schools and local authorities to help them test the scheme.
It will be nationally rolled out between the 2024-25 and 2025-26 academic years.
Changes to Universal Credit
Mr Hunt said parents on Universal Credit receiving help with childcare costs will receive payments up front rather than having to owe the money in arrears.
The Government will also increase the maximum amount parents on Universal Credit can claim to help with childcare costs.
Both changes will come into effect from this summer.
For those with one child the rate will rise to £951 from £646 and for those with two children it will increase to £1,630 from £1,108.
Mr Hunt said: "Today I want to reform our childcare system.
"We have the one of the most expensive systems in the world.
"Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.
"For many women, a career break becomes a career end.
"Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands.
"If we matched Dutch levels of participation, there would be more than one million more women who want to work, in the labour force. And we can."
The changes to Universal Credit mark a huge win The Sun's Make Universal Credit Work campaign, which has been calling for childcare support to be paid upfront and remove barriers stopping parents from getting back to work since December 2018.
Currently, parents on the benefit can claim back 85% of their childcare costs, but they have to pay upfront first.
It means mums are forced out of work as its not financially viable to stay in employment and have to fork out for childcare.
One mum previously told The Sun the rules were "nonsense" after she lost £1,000 in savings and was left massively in debt.
The Chancellor's announcement has been welcomed by charities who had warned of parents falling into debt due to the childcare system.
Dan Paskins from Save the Children said: "The UK Government has made the right decision in deciding to pay childcare fees for those on Universal Credit upfront rather than in arrears.
"This is good for families, good for our economy and most of all, good news for children."
However, Alison Garnham, Child Poverty Action Group's chief executive, said the changes to staff-to-child ratios in nurseries could have a negative impact on quality of education.
She said: "More money for childcare workers will improve the quality of early childhood education and care, but increasing child-adult ratios will drive quality down."
Meanwhile, Stephen Kingdom, campaign manager for the Disabled Children's Partnership, said the budget was a "missed opportunity" to help families with disabled children.
He added: "Economic analysis in 2021 revealed a funding gap of £573 million in social care for disabled children.
"Filling this would have made a massive difference to the lives of thousands of disabled children, their siblings and their parents.
"We welcome the expansion of childcare provision, but with fewer than one in five local authorities having enough childcare for disabled children, this will only help families with disabled children if action is taken to ensure there are places available that can meet the specific needs of their children."
It comes as Jeremy Hunt announced a raft of other measures as part of the Spring budget.
The Chancellor confirmed a huge energy bill change for four million households.
Mr Hunt revealed that firms will not be allowed to charge people with prepayment meters extra fees.
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Meanwhile, a massive £5 billion boost was handed to the defence pot.
However, drinkers face huge tax hikes after the Chancellor confirmed that the price of wine and spirits will rise from August.
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