Childcare sector is facing financial cuts
The childcare sector is bracing for financial cuts. Despite the recent Autumn Statement’s pledge of support, the childcare sector is bracing for financial cuts and a drop in the supply of nursery seats, resulting in a rise in childcare costs.
The childcare sector is facing a crisis as a result of the Government’s austerity policies, which have resulted in funding cuts and a reduced supply of nursery seats.
A spokeswoman from the Department of Education emphasised that they are committed to assisting parents in finding convenient and affordable childcare. They are currently looking into a variety of options, including increasing the cash granted to local governments in order to increase the fees paid to childcare providers. Additionally, extra funding is being offered to early year childcare providers to cover their energy costs.
Despite the Chancellor’s assurances of additional educational funding, parents are facing higher childcare bills and fewer preschool seats as the sector suffers yet another round of budget cuts. In the recent Autumn Statement, Jeremy Hunt announced an additional £2.3 billion per year for the next two years, claiming that the Government could not be “pro-growth” unless it was “pro-education.” However, the new monies are virtually completely for the core school budget, resulting in a £500 million decrease in real terms over the following two years due to inflation. This is regarded to be especially harmful to the childcare sector, and the Government has been held accountable for delaying £1.7 billion for its free childcare allowance, resulting in price increases.
According to Treasury data, daily education spending outside of core school budgets is expected to reach £23.9 billion in 2022/23, then falling to £23.8 billion in 2024/25. This decline in actual expenditure has parents concerned about growing prices and a shortage of available housing in some locations, preventing them from returning to work. Since August 2020, almost 400 nurseries have closed, and the overall number of childcare providers has decreased by 11% in two years.
According to a Coram Family and Childcare survey, childcare expenses have risen by £600 since 2021 for those paying for 50 hours per week. According to a Department for Education spokesman, the government is committed to making childcare more affordable and flexible for parents, and it has increased funding to local authorities for hourly rates to childcare providers, as well as providing more support for early years providers with their energy costs.
If you are looking to know how you could survive as nursery business, please feel free to Book a free consultation now.