Budget: Jeremy Hunt wants to extend free childcare to one- and two-year-olds

  • By Ione Wells & Faisal Islam & Becky Morton
  • BBC News

image source, Getty Images

Free childcare for working parents in England is to be extended to one- and two-year-olds in Wednesday’s budget.

Currently, working parents with three and four-year-old children are entitled to 30 hours of free childcare per week.

The plans are part of a government initiative to encourage more people to return to work to boost economic growth.

Similar funding is expected to be announced for Wales, Scotland and Northern Ireland.

The Ministry of Finance does not formally comment before the budget.

However, she has not denied suggestions, first reported by the Guardian, that the hourly rate paid by the government to childcare workers will also be increased – and that local authorities will be given funds to start setting up comprehensive childcare services in the country from September 2024 schools to start.

The BBC has been told that the current program for three and four year olds will be extended to one and two year olds.

Childcare costs in the UK are among the highest in the world and the government has been pressured, including by some of its own MPs, to provide more help to parents.

The rising cost of childcare has been widely seen as a deterrent for some parents to return to work or work full-time.

The expansion of free childcare has been spearheaded by business group CBI, which calculates that while it will cost billions of pounds, by increasing the number of working parents, it could generate up to £10 billion in additional revenue.

The Guardian also reported that the Government could introduce changes to the staff-to-child ratio for two-year-olds in childcare – from one carer for every four children to 1:5 to bring it in line with Scotland, which the Treasury has also not disputed.

Supporters of the idea say it could help reduce costs for parents.

But the Early Years Alliance, which represents around 14,000 childcare workers in England, said relaxing quotas risked “seriously compromising the safety and quality of care” and putting more pressure on the workforce during “a serious staffing crisis”. .

The organisation’s chief executive, Neil Leitch, said reports of increased spending for the sector “appear positive” but “the devil is in the details”.

He said the government must ensure funding will cover the soaring cost of providing places.

Meanwhile, the government will also confirm that energy bill support will continue at current levels for another three months.

Currently the Government is capping the energy bill for a typical household at £2,500 a year, but this should rise to £3,000 by April 1st.

The Chancellor is expected to resist calls for tax cuts from some Tory MPs.

As prices continue to rise, he has privately told them, “The best tax cut right now is cutting inflation.”

A planned increase in corporate income tax from 19% to 25% is scheduled to take effect on April 1st.

However, according to plans to be announced in the budget, companies can mitigate this increase with a new system of capital allowances.

Other measures expected to be announced by Chancellor Jeremy Hunt include:

No further cash appropriations are expected to be made available for public sector salaries, but Cabinet officials have expressed confidence that many of the industrial disputes are nearing resolution.

In his budget speech, Mr Hunt will refer to the government’s “difficult decisions” last fall “to deliver stability and sound money” after the economic turmoil caused by Liz Truss’ tax cut agenda.

“Today we are delivering the next part of our plan – a budget for growth,” he is expected to say.

“Not just growth out of a downturn.

“But long-term, sustainable, healthy growth that pays our NHS and our schools, finds good jobs for young people and provides a safety net for the elderly.”

The Treasury Department said an effort to get hundreds of thousands more people into work would focus on disabled people and those with long-term health conditions, parents, the over-50s and those on universal credit.

During the pandemic, the workforce shrank in all major countries. But while most leading economies have since recovered, there are still about 400,000 more people out of work in the UK than in December 2019.

Labor said the budget was “an opportunity for Government to steer us away from its path of controlled decline”.

Shadow Chancellor Rachel Reeves said: “After 13 years of economic mismanagement and patch policies lagging behind us, we need to see real ambition from the government on Wednesday.”

The government has already announced that the budget will include more help with childcare costs for universal credit families.

The current ceiling of £646 per month per child for supporting Universal Credit applicants is expected to be raised by several hundred pounds. You also get the funding up front instead of having to reclaim it.

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