Spring Budget 2023: childcare and childminding funding

15 March 2023

Substantial reforms to childcare have been announced in the Spring Budget 2023, by the Chancellor of the Exchequer, Jeremy Hunt on 15 March 2023. Currently almost half a million parents with a child under three years of age in England are not working due to caring responsibilities. Therefore the improvements aim to remove barriers for parents who wish to work, which will help in reducing discrimination against women and benefit the wider economy.

The announcements are:

  • 30 hours free childcare for children over the age of nine months with working parents by September 2025. This will be applicable where eligibility will match the existing three to four-year-old 30 hours offer

  • this will be introduced in phases, with:

           -15 hours of free childcare for working parents of 2-year-olds coming into effect from April 2024

           -15 hours of free childcare for working parents of 9 months to three years old, from September 2024

           -from September 2025, all eligible working parents of children aged nine months up to three years of age will              be able to access 30 free hours per week

  • the funding paid to nurseries for the existing free hours offers will also be increased by £204 million from September 2023, rising to £288 million in 2024

  • wraparound childcare – a national pathfinder scheme will be introduced by the government to enable children to access 8am to 6pm childcare provision in their local area. This will help tackle the barriers to working caused by limited availability

  • paying Universal Credit (UC) childcare support upfront – support to be provided for childcare costs to parents on UC moving into work or increasing their hours in Great Britain rather than in-arrears. An increase of around 50%, with the maximum claim boosted to £951 for one child and £1,630 for two children

  • tackling a short supply of childminders - incentive payments of £600 will be piloted from Autumn of this year for those who sign up to the profession (rising to £1,200 for those who join through an agency). This will aid in increasing the number of childminders available and increase choice and affordability for parents.

Statistics show that there are around 435,000 parents in England with children under three years who are inactive due to caring responsibilities. The group is made up excessively of women and low future expected earnings worsen the UK’s gender pay gap. These new offers circulated by Hunt, will empower parents to work sooner to support their families and progress their careers.

In addition to this, the government will launch a consultation on further measures to support the reform of the childcare market to improve the childcare offer for parents. The consultation will explore further flexibilities for providers, allowing childminders more choice over how they operate, introducing a new streamlined childminder-specific Early Years Foundation Stage framework.

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