During March’s Spring Budget, the Chancellor announced that the government would be increasing childcare support for working parents in England, extending the 15- and 30-hour free childcare places to cover children from 9 months old.
Whilst this is a promising move in helping to support parents wanting to return to work, it will be a phased approach and, frustratingly, these changes won’t begin to come into effect until at least this time next year, meaning that many parents with children who are already of this age group are likely to miss out.
Let’s take a look at what will be happening and when.
What are the changes and when will they come into effect?
Extension of free childcare spaces
The government’s decision to extend free childcare places for 38 weeks of the year will be rolled-out in stages:
- From April 2024, eligible working parents of 2-year-olds will be able to access 15 hours of free childcare per week.
- From September 2024, this will be extended to cover eligible working parents with children aged between 9 months and 3 years.
- From September 2025, eligible working parents with children aged between 9 months and 3 years will be able to access 30 hours of free childcare per week.
Under the current scheme, both parents must be working and each earning at least £2,167 every 3 months in order to qualify for 30 hours of free childcare. If one or both parents have an adjusted net income over £100,000 then they will qualify for 15 hours instead. Further clarification is needed to understand whether these restrictions will apply to the new scheme.
Provider’s hourly rate will be increased
The hourly rate paid to providers is currently significantly less than the actual cost of providing care, meaning that other parents are often charged more in an attempt to cross-subsidise this. To help alleviate this, the government has announced that it will increase its payments by around 30%.
Staff-to-child ratios for 2-year-olds
To tackle the issue of availability in childcare settings, the government has also announced that it will change the staff-to-child ratios for 2-year-olds to 1:5 (currently 1:4). This ratio will align with Scotland and other countries, but there will be no obligation for childcare providers to adopt the new ratio.
Start-up grants for new childminders
A start-up grant of £600 will be offered to new childminders who register with Ofsted. Those who register with a childminder agency will receive a grant of £1,200.
From September 2024, the government will help local authorities set up wraparound childcare facilities in schools by giving £289 million over two academic years.
Universal Credit childcare
In addition to these changes, the government announced that it will pay Universal Credit childcare up-front when parents are either moving into work or increasing their hours. The Universal Credit childcare cap will also increase to £951 for one child and £1,630 for two.
Where do these changes apply?
This increased childcare support currently only applies in England. It will be up to regional governments to decide whether Scotland, Wales and Northern Ireland will follow suit.
If you’d like further information regarding the upcoming childcare changes, please visit the government’s Spring Budget factsheet.