The Welsh government’s finance secretary Mark Drakeford and minister for children Huw Irranca-Davies announced today (27 September) that all registered childcare properties will receive 100 per cent rates relief.
The Welsh government, which says it will review the scheme’s impact, estimates that the exemption will provide £7.5 million of extra support to childcare providers over three years.
Around 100 nurseries in Wales are already benefitting from business rates relief, after the Welsh government raised the upper threshold for business rates relief for childcare settings from £12,000 to £20,500 in April.
Since April, all nurseries in Scotland have been exempt from business rates after the Scottish Government brought in the change, which means that England is now the only country in the UK where nurseries have no exemption from business rates.
The National Day Nurseries Association is increasing its pressure on the Government to bring in business rates relief for nurseries in England and is encouraging nurseries to sign the petition to scrap them.
Welsh finance secretary Mark Drakeford and children's minister Huw Irranca-Davies at Plantos Day Nursery in Cardiff
Announcing the exemption plan, Welsh finance secretary, Mark Drakeford said, ‘Earlier this year we increased the amount of rates relief we provide for registered childcare providers across Wales. We know a significant number of businesses are already benefiting but we want to do more.
‘Today’s announcement means that from April 2019, the childcare sector in Wales will be exempt from paying rates. This will help childcare providers become more established, supporting the sector to operate and grow.
‘This will help to create new childcare jobs and help to create new and maintain existing childcare places across Wales.’
Minister for children Huw Irranca-Davies said, ‘The childcare sector has told us that a total exemption from non-domestic rates would make a real difference to their business confidence. We’ve listened and taken action.
‘In addition to the significant investment we’re making in childcare, and the support we’re providing the sector to grow, today’s announcement shows our commitment to developing a top-class childcare sector in Wales.
‘By providing enhanced support for the childcare sector, we will further improve access to childcare places, supporting working families across Wales and make it easier for people to take up and retain jobs.’
The Welsh Government introduced a new permanent small business rates relief (SBRR) scheme to support small businesses with their non-domestic rates bills in 2018, this included increasing the relief available for registered childcare providers.
The new exemption for childcare premises, reducing rates bills for childcare providers to zero, builds on the permanent SBRR scheme.
The National Day Nurseries Association, which has been lobbying UK governments on the financial burden of business rates on the sector for many years, said the move would be 'a big help' for nurseries and for the sector’s sustainability.
Purnima Tanuku, chief executive of NDNA Cymru, said, ‘This is fantastic news for all childcare businesses in Wales, especially the private sector nurseries who are struggling to remain sustainable.
‘We have been working closely with the Welsh Government and put forward the arguments about why nurseries should be made a special case. Private and voluntary nurseries, who can give working parents the quality and flexibility they need and want, have been delivering funded childcare places at a loss for years.
‘As the new Childcare Offer for Wales is rolled out across the country, this approach from the Welsh Government gives a clear message to the sector that they are valued and their involvement is crucial for this ambitious scheme to be successful.
'Nurseries provide space for children to grow, develop and learn and should not be penalised and taxed for this, it is great news that the Welsh Government has recognised this.’
The minister made the announcement at Plantos Day Nursery in Cardiff, whose owner Lowri Mifsud is NDNA Cymru’s network chair for the Cardiff and Vale of Glamorgan network.
'NDNA has been lobbying the Welsh Government on this issue with dedication for a while and I am pleased with the positive outcome,' she said.
'The childcare sector continues to face challenges and uncertainties. I await to see how the childcare offer will impact on childcare providers. It is crucial that childcare settings are able to provide affordable, high-quality childcare to parents.
'Many nurseries are struggling financially, hit hard by a mix of rising operating costs and staffing costs.'
The Welsh Government has also released new figures on the number of children that have benefited from 30 hours childcare, a year since the scheme was introduced in Wales, where it is made up of the existing minimum of 10 hours of Foundation Phase and up to 20 hours of childcare with a registered provider.
The childcare offer is currently being rolled out across Wales, and is available in at least some areas in half of Wales’ 22 local authorities. It started in September last year with Anglesey/Gwynedd, Flintshire, Blaenau Gwent, Swansea, Rhonda Cynon Taf and Caerphilly.
It will be available across the country by 2020.
During the offer’s first year:
- 3,395 children have taken up places in settings offering the childcare offer
- more than 574 providers are taking part in the scheme.
The children’s minister also announced that following positive discussions with local authorities and using robust modelling, he is increasing the pace of expansion over the coming months and into 2019, after hearing that working parents wanted the offer rolled sooner.
Torfaen and Ceredigion are also already providing the offer across their areas to eligible parents. Newport will be delivering the offer across the authority from October, and Cardiff will begin once all the IT application systems are fully functioning and tested, he said.
By the beginning of 2019, every local authority in North Wales will be delivering the offer to eligible parents. The Vale of Glamorgan, Carmarthenshire, Pembrokeshire, Merthyr Tydfil, Bridgend, Monmouthshire, Swansea and Neath Port Talbot are proposing to deliver the offer across their local authorities during 2019.