Budget 2023: Chancellor pledges ‘landmark childcare reform’
Catherine Gaunt and Katy Morton
Wednesday, March 15, 2023
Chancellor Jeremy Hunt has pledged to increase the availability of childcare and reduce costs for parents in what he called the 'most significant improvement for childcare provision in a decade.'
The extension to 30 hours for all children under five will be phased in, starting in April 2024 with 15 hours for all two-year-olds and 30 hours for all under-fives will not be fully-implemented until September 2025.
Delivering his speech in the House of Commons he said, 'If we really want to remove the barriers to work, we need to go further for parents who have a child under three.'
Describing the introduction of 'free childcare' for three-and four-year olds in 2010 as a landmark reform by the Conservatives he said, 'It was a landmark reform, but not a complete one. I don't want any parents with a child under five to be prevented from working if they want to. Because it's damaging to our economy and unfair mainly to women. So today, I announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three and four year olds, but for every single child over the age of nine months.'
Key points
Extending 30 hours of childcare for working parents
Will be phased in for parents working at least 16 hours a week at national minimum wage.
April 2024 – Offer to start with 15 hours of childcare for parents of two-year-olds.
September 2024 – Extended to 15 hours for working parents of all children aged nine months and above.
September 2025 – All parents of children under five will be eligible for 30 hours of funded childcare.
Funding
Increase early years funding by £204m by September 2023, rising to £288m in next year, which the Treasury said would 'substantially uplift the hourly funding rate paid to providers to deliver the existing free hours offer in England.'
Ratios
Chancellor confirmed staff: child ratios will change from one to four to one to five for two-year-olds in England to bring in line with Scotland.
Childminders
Piloting incentive payments of £600 for childminders, rising to £1,200 for those who join childminder agencies.
Wraparound care
Fund schools and local authorities to increase supply of wraparound care, so all school aged parents can drop their children off between 8am and 6pm.
Ambition that all schools will start to offer a full wraparound offer, either on their own or in partnership with other schools by September 2026.
Universal credit
Chancellor to support 700,000 parents on universal credit.
Will pay childcare costs upfront to help parents access ‘subsidised childcare’.
Parents will be able to claim up to £951 for one child and £1,630 for two children.
