In a speech to the Scottish Parliament, Finance Secretary Derek Mackay confirmed that nurseries in Scotland will be exempt from business rates from next April.
‘I propose that the new relief for day nurseries will commence on 1 April 2018 and will be a full 100 per cent relief,’ he said.
‘Scotland has always been a leader in education and childcare and this is the first relief of its kind anywhere in the UK.’
The Scottish Government-commissioned report into non-domestic business rates by the Barclay review group recommended a new 100 per cent business rate relief be introduced for nurseries to support childcare provision.
According to the report, it will save the childcare sector around £8m a year.
The Finance Secretary told MSPs that he would be implementing ‘the vast majority’ of the 30 recommendations from the report into non-domestic rates in Scotland by Ken Barclay, which was published three weeks ago.
The report included plans to boost economic growth, improve administration and increase transparency and fairness.
Mr Mackay said that he was publishing a full response to the Barclay report and committing to a full implementation plan before the end of 2017.
'My message to business after announcing this package is clear. Come to Scotland. Invest in Scotland, and grow your business in Scotland,' he said.
The end to business rates for nurseries was warmly welcomed by the early years sector, with calls for England and Wales to follow suit.
Purnima Tanuku, chief executive of the National Day Nurseries Association, said, ‘This really is fantastic news and the right resolution following determined campaigning from NDNA Scotland and our members, especially Stephanie Dodds our network chair who started the petition.
‘Giving nurseries an exemption to business rates will make a huge difference to childcare businesses and support them in delivering expanded free childcare by 2020.
‘We congratulate the Scottish Government for its progressive thinking regarding early years education.’
NDNA’s annual nursery survey found that for 51 per cent of nurseries in England removing business rates costs would help them deliver 30 hours in lieu of an increase of their hourly rate, she added. In Wales, the cost of business rates was listed as the third biggest challenge facing nurseries, along with achieving profit or surplus and cost of utilities.
Mrs Tanuku said, ’We hope now that England and Wales follow suit – particularly in England where nurseries have the added financial burden of delivering 30 hours expanded childcare.
‘We have long campaigned for exemption, arguing that nurseries offer a social and economic good in providing good quality early years education and allowing parents to work. Increasing business costs, including National Minimum Wage rises, mean many nurseries are struggling to stay in business and fees are rising for parents whose children don’t qualify for free hours.'