Campaigners, parents and the early-years sector in England have welcomed a major extension of state support for childcare costs, but warned that the plans would take years to come into effect and fail without sufficient funding.
In a move that was met with delight by parents but given a cautious welcome by campaigners, Chancellor Jeremy Hunt confirmed a £4bn expansion of free 30 hours of childcare for all preschool children from nine months from 2025, and promised extended wraparound care for school-age children by 2026.
As part of a wider drive to help people into work and boost growth, the plan will provide an extra 30 hours a week during term time to parents of children from the age of nine months to two years, matching the existing offering for three and four-year-olds.
“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,” said Hunt, as he claimed the move would reduce childcare costs for families by nearly 60%.
But an increase in the number of two-year-olds each adult can look after in a childcare setting from 1:4 to 1:5 was met with anger by campaigners.
The chancellor promised more funding to the early-years sector, which has long argued that the amount providers receive from the government for the current offer for three- and four-year-olds leave them out of pocket, and recouping costs from parents.
Funding to nurseries providing free childcare under the current hours offer will increase by £204m from this September, rising to £288m next year, which the chancellor said was a 30% increase. Nurseries have been closing down because while they are obliged by law to provide free places, the government does not fully reimburse the costs of providing them.
Appealing to parents with older children, Hunt said the government will also fund schools and local authorities to increase the availability of wraparound care for parents of school-age children, from 8am and 6pm. However, the change will not come into force until 2026.
The chancellor also confirmed that parents on universal credit can now get childcare costs paid upfront, while the amount they can claim back will rise to £951 and £1,630 for two children, an increase of almost 50%.
Addressing a “significant decline” in childminders, which he said had dropped by 9% in England in one year, Hunt said the government would pilot incentive payments of £600 for childminders who sign up to the profession, rising to £1,200 to those who join through an agency.
Hunt said the reform would be introduced in stages to ensure supply in the market, with working parents of two-year-olds able to access 15 hours of free care a week during term time from April 2023, while nine-month-olds will qualify for funding by September 2024. From 25 September, all working parents of under fives will have access to 30 hours free childcare a week, said the chancellor.
Keir Starmer accused the government of following Labour’s lead on pushing for childcare reform, adding that while “more money in the system” was a positive “as parents up and down the country know it’s no use having more free hours if you can’t access them, and it pushes up the costs for parents.”
Joeli Brearley, founder of the campaign group Pregnant Then Screwed, said she was “really pleased” that the government had recognised that “investing in childcare is good for the economy”, but she warned that the £4bn investment was insufficient. Research from The Confederation of British Industry (CBI) estimates that fully funding the existing schemes for three- to four-year-olds and expanding the scheme to one- and two-year-olds would cost £8.9bn.
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She warned about a real danger that demand for childcare places would far outstrip supply. There are 2.4 children for every childcare place in England, and there has been a 19% decline in the number of providers since 2017, according to Labour’s analysis of government figures. A separate survey of local authorities in England by the children’s charity Coram found that only half had sufficient childcare places to meet the demand of parents working full time.
Neil Leitch, CEO of the Early Years Alliance, said the move would be a “gamechanger” for families, with parents of one-year-olds facing bills of more than £14,000 a year.
But he also stressed that the sector needed any “free” hours for parents to be properly funded. An EYA investigation in 2021 found that the government had knowingly underfunded the sector in England, driving childcare costs up and quality down.
“We need to make sure that new investment supports the sector and improves the quality and availability of childcare for every child as well as making it affordable for parents,” he said.
But he slammed government moves to push ahead with plans to relax ratios for two-year-olds from 1:4 to 1:5 – which Hunt said would be “optional” for providers. Neil called the move “shameful” and warned it would risk quality and increase pressure on educators with no benefit to parents, and also undermined the new investment promises.
“Ever since this policy was first floated, it has received almost universal opposition,” he said. “What exactly was the point of consulting if ministers were already going to completely ignore the needs of providers and parents and charge ahead regardless?”