Wales extends business rates relief for nurseries until 2025

Registered childcare premises in Wales will benefit from 100 per cent non-domestic rates relief for an extra three years, the deputy minister for social services Julie Morgan has announced.

The extension of the rates relief, until 31 March 2025, will provide £9.7m of extra support for registered childcare premises, the Welsh government said.

It is aimed at helping those who are facing financial difficulties as a result of the pandemic and secure the level of provision that children and parents need and rely on.

The Small Business Rates Relief scheme was enhanced in April 2019 to provide 100 per cent relief to all registered childcare premises in Wales for three years, as part of a move to help the sector deliver 30-hour childcare.

Julie Morgan, deputy minister for social services said, ‘We are committed to investing in Wales’ childcare sector. It is vital we recognise the essential service childcare settings provide to families, offering positive and caring environments for our children and helping parents to access employment, education or training.

‘The pandemic has had a devastating impact on businesses across Wales and childcare settings have been severely impacted. The pandemic has created new, and exacerbated existing challenges for childcare settings. The extension of the rates relief will help registered childcare premises continue the crucial work they do and help to ensure they remain viable businesses.’

The move has been welcomed by sector organisations who have campaigned for an end to business rates for childcare providers and who reiterated calls on the Government to do the same in England.

Purnima Tanuku, chief executive of the National Day Nurseries Association (NDNA) Cymru, said, ‘We really welcome this very positive announcement from the Welsh Government which will continue to support childcare providers and parents by extending business rates relief for a further three years. 

‘This extended relief shows recognition of the important role of private, voluntary and independent settings in delivering early education and vital childcare places.’

The NDNA said that speaking to providers about how the relief has helped them, 35 per cent had told them it had allowed them to keep childcare costs lower for parents, while just under a third said it had helped them stay sustainable, reducing the risk of settings closing.

Other benefits were being able to invest in staff, resources and their premises.

Tina Jones, owner of Tiny Tots Day Nursery and Out of School Club, who is also a trustee for NDNA Cymru, said, ‘This is fantastic news for childcare settings like mine and means we can keep offering affordable places for families in our area. Business rates were a large cost to find for our settings and the irony was that the more space you had for the children, the higher your rates. This relief has helped us remain sustainable over really uncertain times, particularly with the pandemic.

‘Over the past three years with the business rates relief in place I've been able to avoid increasing my fees to parents. We've also invested in our outdoor space meaning children have great opportunities to learn through play in different environments. It has been a great support and it is such good news that this will be in place for another three years.’

Last December, the Scottish Government confirmed that nurseries in Scotland would be exempt from paying business rates until 2023.

The Nursery Rates Relief Scheme in Scotland, which was initially due to end on 31 March 2021, has been extended until ‘at least’ June 2023.

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said, ‘While we recognise that business rates are only one piece of the puzzle and do not affect all early years providers, there is no doubt that both extending business rate relief beyond March 2022 and increasing it back up to 100 per cent would give some much-needed breathing space to eligible providers at what is still an incredibly difficult time for many settings. 

‘If the Scottish and Welsh governments can recognise the need for such action, then there is no reason that policymakers in England cannot do the same. 

‘As such, we urge the Government to use the upcoming Spending Review to announce the extension of business rate relief rates for all eligible early years settings – or better still, a permanent exemption for the sector – alongside much-needed wider early years funding reforms.’