Are you a parent struggling to get back into work due to childcare costs?
In the recent budget announcement, Chancellor Jeremy Hunt has announced he wants to help a million more women back into work through extending free childcare and breakfast clubs.
The chancellor’s ‘back to work’ budget has been put in place to tackle the high levels of workforce inactivity after Covid. The Office for Budget Responsibility (OBR) has estimated that UK employment will rise by 75,000 by 2027-28, as well as allowing existing working mothers to increase their working hours.
This announcement has come after years of campaigning from parents (mainly mothers), who have been forced out of the workforce by a chronic shortage of affordable childcare.
A survey of 27,000 parents found that almost two-thirds of families spent more on childcare than their mortgage or rent
Campaign Group ‘Pregnant Then Screwed’, 2022
Who does this benefit?
The current rules for 30 hours of free childcare, for 38 weeks of the year (during term time), is available to parents with 3 & 4 year olds.
The free childcare boost, starting April 2024, will be extended to parents with children over 9 months to 5 years of age.
The scheme will benefit most* parents, receiving up to 30 hours of funded childcare, once your child has turned 9 months old.
All parents in a household must be working at least 16 hours per week at minimum wage to qualify for the scheme. This is to avoid parents who are not in work claiming the benefit.
*If both parents earn less than £100,000 per annum combined you will be eligible to receive free childcare support.
The new rules are expected to save parents with a two-year-old in care for 35 hours a week an average of £6,500 per year
Telegraph, 2023
When will this start?
Working parents of two-year-olds will be able to access 15 hours of free childcare a week from April 2024, which the Government is estimating to help around 285,000 families. A further 640,000 parents of children aged between 9 months to 2 years will be eligible from September 2024.
However, the funding is more likely to benefit new parents as the proposed 30 hours of free childcare for children under 5 will be phased in by September 2025, meaning many current parents won’t benefit from the policy or will need to wait two more years.
Schools will be expected to provide breakfast and ‘wraparound’ clubs by September 2026.
You will start to receive this funding from the moment your maternity and paternity leave ends.
Why will it take so long?
The Chancellor Jeremy Hunt has said:
“Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.”
What are the issues surrounding this announcement?
- This decision will cost £5.3 billion per year of tax payers money
- The concern is that it will be impossible to implement due to not having enough childcare places available
- Nursery providers are stating that the free funding they receive from the Government does not cover the cost of providing those extra hours of childcare, minimum wage rises every April and they will not be able to operate if funding remains this low
- There is a lack of qualified staff to cater for looking after more children attending nurseries and childminders, the sector is already struggling with recruiting and retaining staff
- There are plans to relax ratios of adults to children. Currently there needs to be one adult per 4 x two year old’s, which is increasing to 5 x two year old’s which questions whether standards in quality of care will decrease
- There is currently a shortage of space in nurseries and with childminders, so a key proposal from the Chancellor is to encourage more childminders to enter the workforce – according to Ofstead more than 10,000 childminders have closed in the past five years
Read more Government announcements on our blog:
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