Budget 2023: Childcare reforms

As part of his ‘Budget for Growth’, the Chancellor, Jeremy Hunt, outlined his reforms for childcare over the next couple of years. This is intended to enable working parents of young children to return to work and feel supported to do so.

The Chancellor stated; “I don’t want any parent with a child under 5 to be prevented from working if they want to because it’s damaging for our economy and unfair on women”.

In summary, the current scheme provides working parents to get up to 30 hours’ free childcare with an approved childcare provider, during term time, if the child is 3 or 4 years old. There are also several conditions to be eligible for this free childcare, including both parents working at least 16 hours per week, and you will not be eligible if you or your partner have ‘adjusted net earnings’ of over £100,000.

Under the reforms announced today, by September 2025 30 hours of free childcare will be provided for every child over 9 months old with working parents, with the same eligibility criteria as the current scheme.

To ensure childcare providers are not overwhelmed and places are available, the reforms will be rolled out in a phased approach with two-year-olds getting 15 hours of free childcare from April 2024 and this will be extended to all children aged from 9 months from September 2024. Then from September 2025, every working parent of under 5-year-olds will have access to 30 free hours of childcare.

There will also be incentive payments from Autumn this year for those who join the childminding profession.

Additionally, as part of the reforms, schools and local authorities will be provided with increased funding to increase the supply of wraparound care so parents can drop off and pick up their school aged children between 8am and 6pm, which would allow parents to work additional hours during the week.

The Chancellor’s childcare reforms are primarily focused on the Conservatives party’s growth initiative, addressing the current high levels of employment inactivity in the economy, and should provide a greater level of support and flexibility for working parents with young and school aged children.

Whilst the desire to provide additional childcare, and encourage working parents back into the workforce is laudable, the practicalities of recruiting sufficient childcare workers, and the impact of more part-time and flexible working arrangements for employers will need to be addressed.

If the Budget has raised any questions for you, book your place on our Budget question time webinar this Friday, 17 March at 9:30am. Alternatively, if you would like further information, please get in touch with our team.