smallvery tight rhythm In Lisa Evans’ office, but enough important stuff. Bags of chocolate eggs sit on a cardboard box ready for the daily hunt on Easter Eve. At Abacus Nursery and Childcare in New Romney, a stone’s throw from the Kent coast, the rooms where children play and learn are bright and airy. But the cash register is as full as the manager’s cubicle. Although Abacus can accommodate 60 children at a time during the day, breakfast and after-school clubs, there are almost no places available this coming September.
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As Jeremy Hunt presented his budget on March 15, parents were asking Abacus for more time. The chancellor has unveiled plans for a massive expansion of “free” (that is, government-funded) childcare, hoping to lure more parents, especially mothers, back to work. The Institute for Fiscal Studies calculates that the government will actually set about 80% of the price of preschool care (international Finance Center), a think tank, has grown from less than half what it is today. But it is doubtful whether nurseries and nannies — who often look after small groups in their own homes — can handle the surge.
From September 2025, working parents will be entitled to 30 hours of state-funded childcare a week, equivalent to 38 weeks a year, once their children are nine months old. (Mr. Hunter provides 15 sponsored hours for two-year-olds beginning in April 2024.) Currently only working parents with three- and four-year-olds are eligible for that much. All parents of 3- and 4-year-olds are entitled to 15 hours of paid work time, and the most disadvantaged (approximately 40%) can also have 2-year-olds. Parents pay for the extra time, usually lunch and other extras.
The chancellor has also lifted the cap on help for parents who get Universal Credit, the main working-age benefit, to buy extra time – from £646 ($780) for one child to £1,108 for two or more , which has been stuck for years, at £951 and £1,630 respectively. They can also apply early instead of waiting weeks because they can’t afford it.
The watchdog, the Office for Budget Responsibility, estimated that of all Mr Hunt’s measures, extending childcare hours by 30 hours would have the biggest boost to economic output. It expects 60,000 people to work an average of 16 hours a week by 2027-28, adding those already putting in more hours at work would have the same effect. Raising the universal credit limit could add another 15,000 jobs.
This may be overly optimistic. It’s hard to know how many parents of young children would prefer to care for them. The same goes for predicting whether there will be enough nurseries. Many nannies, in particular, have closed their doors, although education regulator Ofsted said total numbers had remained stable in recent years. Suppliers say the hourly rates for “free” time are well below their costs because wages (about three-quarters of their expenses) and energy prices have risen. They make up for it by charging more for the extra time: In New Romney, Ms. Evans will raise prices after Easter. Extending the free time would reduce the scope for such things.
Mr Hunt is trying to lure the nannies back and is offering them a £600 bounty. He also increased the provider’s hourly rates for 2023-24 and 2024-25. That, guess Christine Farquharson international Finance Center, which covers expected increases in wages and other provider costs, but excludes the 13 percent decline in real funding since 2017-18 (after adjusting for industry-specific price indices). The government has also relaxed minimum staff-to-child ratios, although for some it means cutting corners and costs. “Fewer staff means less quality,” Ms Evans said. Childcare pressures in the UK could become more strained if measures in the budget don’t attract more suppliers to the industry.■
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