![]() ![]() Ministers have already announced plans, to be confirmed in the budget, to pay childcare support to parents on universal credit up front, instead in arrears. The chancellor said on Sunday that childcare costs were stopping some parents from taking a job and the government could make a “big difference” by helping to reduce them further, as part of a package of measures to break down barriers to entering the workforce. “Unless they are properly funded for what they do, there is no point just offering more and more hours.” “It is all about getting money to the providers at this point,” said one Tory MP. The government subsidy rate for that place is £6.66. In Hammersmith and Fulham in London, for example, a recent study by Nesta showed that a place for a two-year-old cost £10 an hour. Many experts have been warning that government subsidies are not sufficient to fund the places needed, leading to large supply gaps in parts of the country. They also said that the DfE had been pushing for the hours to be funded “at cost” rather than the current low rate, which has led to childcare providers struggling and in many cases asking for top-up payments from parents. One Treasury source suggested that the Department for Education could decide how to split the new funding better between the existing offer for three-year-olds and new provision for younger age groups.Ī second senior Whitehall source said they believed that Hunt could set out a new free hours entitlement for parents of children aged between nine and 36 months and an additional offer for one-year-olds from disadvantaged families. The plan was first mooted by Liz Truss but was reported to have been scrapped by Sunak, as it would prove expensive and unpopular. The government is also expected to bring in changes to the staff-to-child ratios for two-year-olds in childcare, moving from 1:4 to 1:5 to align with Scotland, and will consult on further measures to give providers flexibility. The chancellor is also expected to extend household energy bill support by three months, increase corporation tax from 19% to 25% in April, freeze fuel duty and announce a £5bn boost for defence spending. While the markets have calmed since Liz Truss’s disastrous mini-budget last September and the economic outlook is less turbulent, millions of people are still grappling with the cost of living, while inflation is at a 40-year high and the country is gripped by strikes.Ĭonservative MPs who have called for tax cuts are likely to be disappointed as the chancellor focuses on delivering Sunak’s pledge to boost growth by encouraging the over-50s, people with disabilities and chronic conditions, and benefits claimants back into the workplace. Rishi Sunak was understood to be taking a final decision on signing off the plan, which government insiders believe would help him deliver on his pledge to increase sluggish growth, on his return from the US on Tuesday. ![]() Officials suggested the measure could be Hunt’s “rabbit from the hat” moment in a statement that was otherwise expected to yield few surprises, with the chancellor downplaying expectations of tax cuts or other big spending commitments. However, it is understood the proposal came back on the table following forecasts that suggested it could help boost growth.Ĭhildcare has emerged as a key political battleground in the run-up to the next election, with UK parents facing among the highest costs in the world, meaning that some parents, even those on middle incomes, conclude it is not worth taking on new or extra work. The Guardian revealed last month that the Treasury had commissioned work to look at the costings of free childcare for one- and two-year-olds but Hunt had feared it would prove too expensive. The government will give local authorities funding to start setting up wraparound childcare provision in schools, starting in September 2024, as it tries to match Labour’s pledge to come up with a bold offer on childcare ahead of the next election. The chancellor, Jeremy Hunt, is planning to increase the hourly rate paid to childcare providers by the government to deliver their existing 30 hours weekly entitlement, a key demand from the sector and some Conservative MPs. ![]()
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