Delivering the Autumn Statement in the House of Commons today, Mr Osborne said that from September 2014, all pupils in reception, Year 1 and Year 2 will receive free school meals (FSM).
The Deputy Prime Minister Nick Clegg first announced plans to extend FSM to all children under eight during the Liberal Democrat conference in September.
The Government will provide £450 million in 2014 to 2015 and £635 million in 2015 to 2016 to the Department for Education to fund this commitment.
To enable schools to meet the offer, the Government is also providing £150 million of capital funding for schools to increase the capacity of their kitchens and dining halls.
According to the Deputy Prime Minister, £70 million of the funding will be new money from the Treasury and around £80 million from ‘unspent’ Department for Education (DfE) maintenance budgets.
However, reports suggest that the DfE has claimed there is no spare money in its maintenance budget.
Nursery World contacted the Department for Education, but they refused to comment on the issue.
The Chancellor also announced changes to the way employers receive funding for the training costs of apprentices.
At present, training organisations claim funding on an employers' behalf for the training they provide to apprentices, but under the new reforms employers will have to claim costs themselves through an HMRC-led system. They will also be required to pay some of the costs.
London Councils has warned that the new system could discourage employers from taking on apprentices. A survey of 203 small and medium enterprises carried out for London Councils found that 73 per cent would withdraw apprenticeship opportunities if they were asked to cover some of the training costs.
Its executive member for employment and skills Peter John said, ‘It is important that employers take a leading role in apprenticeships but we want to ensure these changes do not discourage employers taking on young people.
‘Small and medium size enterprises (SMEs) provided 88 per cent of the apprenticeship opportunities in London in 2011/12, making a real difference to the lives of young Londoners and representing a huge investment in the future of our city. Given this statistic we would urge the Government to tailor a new apprenticeship system to the needs of SMEs which often do not have the time, resources or money of larger companies.
‘At the moment, it is very clear what apprenticeships are being delivered, who is responsible and what outcomes have been achieved. We would want any funding system to be equally open to scrutiny.’
The Chancellor went on to announce Government plans to abolish employer National Insurance contributions for employees under the age of 21 to make it cheaper for businesses to employ young people. The move, which would come into effect in April 2015, would apply to employees earning up to £813 per week, equivalent to the point at which higher rate tax is charged.
Mr Osborne also announced a cap on Business rate inflation to two per cent in 2014-15, and plans to extend the doubling of Small Business Rate relief by another year to April 2015.
The National Day Nurseries (NDNA), which has long campaigned for nurseries to be exempt from business rates, said the announcement would be a dissapointment to the majority of nursery owners.
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA), said, 'The rates cap, although acknowledging the burden on businesses, will have little impact on the crippling rates childcare providers are already struggling under. Alongside this most nurseries have rateable values that are too high to benefit from the small business rates relief extension.
‘Nurseries in the private sector should be placed on a level playing field with maintained and voluntary settings and have the burden of business rates removed.’
Comments from the sector
On Free School Meals
Linda Cregan, chief executive of the Children’s Food Trust
‘If we want more children eating in our canteens, schools have got to have the kitchens, equipment, dining room space and systems they need.’
‘Some schools are already in a good position to get ready to serve more meals next September with the right support. But for others, capital funding for new facilities or refurbishment is going to be absolutely essential.
‘We look forward to seeing more detail of how this funding will be allocated, making sure it gets to the schools that most need it, and that it’s used in the most effective way to make sure every child taking up these free school meals gets a great experience.’
Brian Strutton, national Secretary for public services at GMB the union
‘Around a quarter of schools do not have adequate catering or dining facilities to provide a daily meal so any steps to build or upgrade school kitchens is welcome.
However it is unclear how this limited sum will be allocated and if, as it seems, half is coming from school maintenance budgets then it may not be such a boost after all.’
Christine Blower, general secretary of the National Union of Teachers (NUT)
‘In light of the alarming increase in food banks, universal free school meals for infants are welcome, though it is essential that the Government provides enough additional resources for schools to meet the capital and staffing costs involved. It must be stressed that while the NUT fully supports this move, children over the age of seven also urgently need the same provision and we ask again that Government extends free school meals to all pupils.
‘Investment in education is essential for economic prosperity and social cohesion. This Government has not protected school funding. Funding for schools has been frozen in cash terms, meaning significant ‘real terms’ reductions in the value of school funding due to the effects of inflation.’
She added, ‘There was no proposal in the Chancellor’s statement to help us cope with the unfolding school places crisis which could see one in four children without a school place by 2016.’
Dr Hilary Emery, chief executive of the National Children’s Bureau (NCB)
‘We welcome the commitment from the Chancellor to make free school meals available for all infant school children from September 2014. However, we are concerned that the Government continues to take a piecemeal approach to children’s policy, particularly in terms of ensuring children are at the heart of funding decisions. While it is good news that budgets for the NHS and schools are protected, there should be greater protection for budgets which affect vulnerable children and those who rely on other state services such as social care.’
Beatrice Merrick, chief executive of Early Education
'We hope that ministers will extend the FSM entitlement to all children spending a full day in a funded place in any stage of the EYFS as soon as budgets allow.
'The autumn statement was also a missed opportunity to implement Alan Milburn's recommendation to extend the pupil premium to the early years. With increasing pressure on children's centres and early years settings, this would do much to ensure the most vulnerable children received the best support, by targeting funding where it is most needed.'
On National Insurance:
Anne Longfield, chief executive of 4Children
‘Currently this country is squandering the talent and energy of far too many of its young people, with over a million not in employment, education or training. We strongly welcome the Chancellor’s announcement encouraging employers to open the door to them by removing National Insurance contributions for under 21 year olds.’
Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA)
‘NDNA welcomes the initiative to abolish National Insurance for employees under the age of 21.
‘Nurseries will be interested in this extra help to recruit committed and ambitious young people into childcare and invest in their careers, whilst keeping a healthy balance of staff across the age range.