The Spring Budget came with big announcements about childcare…but which announcements will affect you and your family might be unclear. Our explainer and FAQs on the childcare announcements might help to clarify.

⭐Please note: This is for England only  

When do the new funded hours kick in?

• In April 2024 working parents of two year olds an access 15 hours of funded childcare per week for 38 weeks of the year. 
• In September 2024 working parents of children aged nine months up to three years old can access 15 hours of funded childcare per week for 38 weeks of the year. 
• In September 2025 working parents of children aged nine months – three years can access 30 hours of funded childcare per week for 38 weeks of the year. 

 

What is the eligibility criteria for the new funded hours?

• Currently, the eligibility criteria will be the same as the 30 funded hours for three and four year olds. You can read more about the eligibility here.
• However, we will soon be launching campaigns to amend the eligibility criteria so that it includes those who are studying and training and so that the maximum income is based on household income, rather than individual income.

 

Will this really happen? Or is it just a ploy to win votes? 

• The first two stages will happen before the next general election. The latest the next general election can happen is January 2025, but if the rumours are to be believed, then it may be announced just before that in November 2024. If the Government fails to implement the first two stages it will reflect very badly on them and the timing couldn’t be worse so it is in their interest to ensure this plan is deliverable. 

 

What are the problems with the scheme? 

• There are a number of potential problems with the proposed childcare scheme. The most significant is the need to recruit and train an estimated 38,000 childcare practitioners to deliver the number of new places required. This is a monumental challenge and we are yet to see a workforce strategy from the Government to show how they plan to address this. There is also an issue with the amount of money committed to the plan. The shortfall in funding to deliver the current 30 hours ‘free’ scheme for three-four year olds is estimated to be over £1 billion; this means that childcare providers are forced to cross subsidise the Government schemes by charging more for younger children so they can stay afloat. If the Government does not rectify this financial shortfall and removes the ability for providers to cross subsidise, inevitably more providers will close thereby reducing capacity. The Women’s Budget Group estimates that another £4 billion is required to effectively fulfil the promises made by the Government.
• We know that providers are understandably concerned about this impact these new plans will have on their businesses and we have asked the Department for Education to publish their financial modelling so that it can be scrutinised. 
• The other key issue with the scheme is that it doesn’t support families struggling with childcare costs right now. These are families who would really benefit from high quality childcare as they have children born during the pandemic. We are also in the middle of a cost of living crisis so the argument for immediate support is strong. 

 

What is going on with ratios? 

• As part of the budget, the Government slipped through a change that no-one wanted – increased ratios for two year olds. This means that in some (not all) nurseries, a childcare practitioner will care for five two-year olds, rather than four two-year olds. It is not mandatory for providers to increase ratios.
• We were very unhappy to see this being pushed through despite opposition from both providers and parents.