Nurseries to be exempt from business rates, as Government brings in powers to close or keep them open

All private, voluntary and independent nurseries will be exempt from business rates for one year from 1 April.

All nurseries in England will be exempt from business rates for 12 months from 1 April 2020
All nurseries in England will be exempt from business rates for 12 months from 1 April 2020

The move will be welcomed by sector organisations and childcare providers who have been urgently calling for nurseries to be included in exemptions from business rates, which the Chancellor had previously applied to the retail, hospitality and leisure industries.

The Government is also bringing forward the Coronavirus Bill to Parliament today, which would give powers to instruct childcare providers to close, keep open, or change ratios.

The Department for Education has confirmed to the sector that the plans will also apply to childminders.

It follows the decision to close all schools in England from Monday (23 March), with some kept open for key workers and vulnerable children.

In his daily press conference yesterday, prime minister Boris Johnson said that the Government would define what it means by key workers.

'By looking after the children of key workers' he said that schools would be 'part of the fight back' against the coronavirus.

In a tweet last night (18 March) Chancellor Rishi Sunak said, ‘To support nurseries at this time, we have decided that they will also be eligible for a business rates holiday for one year from 1 April.

‘Local authorities will be fully compensated for the cost of this and we are applying the Barnett formula to the additional support. #COVID19'.

The Government said that non-local authority providers of childcare will pay no business rates in 2020-21, from 1 April, and that local authorities would be fully compensated for the cost of this measure.

It said that guidance for local authorities on the application of the holiday would be published by the Ministry of Housing, Communities and Local Government shortly.

Leading sector representatives are due to hold a remote Covid-19 response meeting with Department for Education officials later today (19 March), which will cover issues such as extra financial support for childcare providers and the definition of key workers.

Nursery World understands that the Government is likely to make extra financial support available, in addition to the business rates holiday, to help nurseries survive during the coronavirus crisis.

Purnima Tanuku, chief executive of the National Day Nurseries Association, (NDNA), said, 'Following years of pressing the Government hard on the issue of business rates relief for nursery businesses, it is at least one welcome piece of news that they will be included in the rates relief holiday.

'We will be pushing the Chancellor to clarify details of the financial support to be made available to nurseries over the coming weeks. This must be sufficient to ensure they can remain sustainable as businesses otherwise we will see huge numbers of closures across the country.'

Coronavirus Bill

Guidance published by the Government said that to ease the burden on the NHS and frontline workers, the bill would ‘provide powers to require educational institutions or childcare providers to stay open or relax some requirements around education legislation in order to help these institutions run effectively during the event of an emergency. 

‘This could include reducing teacher ratios, adapting school meal standards and relaxing provisions for those with special educational needs. 

‘This will ensure that children, young people and those who work with them remain safe, while minimising disruption to everyday life and progression to further and higher education or employment by ensuring schools have the flexibility and support they need to respond pragmatically to the changing situation.’

What powers will the bill have?

The Government said the legislation will be limited to two years and not all of the measures would come into force immediately. 

The bill allows the Governments  of England, Scotland, Wales and Northern Ireland to switch on these new powers when they are needed, and, crucially, to switch them off again once they are no longer necessary, based on the advice of Chief Medical Officers of the four nations.

The Government said that the measures in the bill are ‘temporary, proportionate to the threat we face, will only be used when strictly necessary and be in place for as long as required to respond to the situation.

‘We have worked closely with the devolved administrations to develop an effective package of measures to support frontline staff and individuals involved in this vital national response.’

What will 'partial closure' mean?

In a letter sent last night to members and supporters, chief executive of the Early Years Alliance, Neil Leitch said, 'The government has said that it "expects" childcare providers to partially close on Friday, but we are aware that legislation is currently going through Parliament that could allow the Prime Minister to force providers to do so. The DfE must confirm if this will be an obligatory position going forward.

'The Department must also clarify what "partial closure" looks like in practice. This includes the definition of key workers, the definition of vulnerable children, the expectation on the type of provision providers will be expected to deliver during this time, and how exactly businesses will be expected to function on a day-to-day basis under these rules.'

Mr Leitch added that 'the matter of financial support is also critical', especially for those providers that are 'heavily reliant on private fees'.


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