Childcare funding has been all over the news in the UK this month, following the far-reaching childcare funding reforms that were announced in the Chancellor’s Spring Budget for 2023. The announcement is indeed of significant new funding, which is set to allow far more children and families to benefit from free, Government-funded childcare in the near future. Early indications are that it’s going to be a game-changer, with even younger infants gaining free access to an early years education and new parents, particularly mothers, having a much more viable route to returning to the workplace following the birth of a child. But what exactly are the changes and will they benefit your family? Today, we answer all such questions in our guide to the new childcare funding announced in the Spring Budget 2023.
The Chancellor has announced 3 key childcare funding improvements that will be phased in during the run-up to September 2025:
- Up to 30 hours per week of free childcare will become available for eligible children aged from just 9 months right up to school age.
- More generous Universal Credit childcare support will be available for working parents — and it’ll be pre-funded to ease cash flow.
- Improvements to Government-funded childcare hours for working parents of school age children will be introduced, via a Wraparound Care ‘Pathfinder’ scheme.
Any one of the three funding reforms above could make a huge difference for eligible families. We’ll explore each in more detail below.
Up to 30 Hours Per Week of Free Childcare for Children Aged from 9 Months
Until now, only 3- and 4-year-olds in England were guaranteed to receive 15 hours (30 in some cases) of free childcare funding each week, and only some 2-year-olds have been eligible for the ‘15 hours’ scheme, for example if their families were in receipt of some kind of benefit. However, in what some might call a childcare funding revolution, the Chancellor has announced that many children aged from only 9 months will soon be eligible for 30 hours per week of free childcare. Their funded childcare hours could then be available to them from that young age right up until they leave early years childcare to start school around the age of five.
The funding will be rolled out in stages and is for children of working parents. First, 2-year-olds will become eligible for 15 hours of free childcare per week, for 38 weeks per year, from April 2024. Then, children aged from just 9 months of age will become eligible for the funding from September the same year. Together, this will benefit just shy of a million children. Lastly, starting in September 2025, children aged from 9 months to 3 years will be eligible to receive the full 30 hours per week of the free childcare, again over 38 weeks per annum, if eligible. The existing funding for 3- and 4-year-olds will continue in its current form.
Eligibility for the new, funded, hours will use the same criteria as used for the existing 30 hours scheme for 3- and 4-year-olds.
This new initiative will make a huge difference to families.
- Firstly, of course, children will benefit by being able to begin their early years education far earlier, in many cases, than they might otherwise have been able to do. Prosocial behaviour will be boosted, self-regulation will be improved, peer relationships will benefit and there’s even less likelihood of hyperactivity amongst children who received a good education in their earliest years. A good early years education, particularly if started no later than the age of 2, is proven to be hugely important and beneficial to children. It not only gets them well ahead by the time they start school, but statistics show they are likely to attain significantly higher grades at school and in GCSEs, and are more likely to go on to study in higher education when they’re older. They will be likely to earn more once they’re adults too. Learn more about the benefits of a good early years education here.
- Parents and households will also benefit hugely from this new funding. Because it will be available far earlier in their child’s life, parents will be able to return to work sooner after children are born — not long after maternity/paternity leave ends in fact. This will make a difference to mothers in particular, as many struggle being able to afford childcare when trying to get back into the workplace after becoming a parent. And, of course, it’ll allow families to boost household income.
“Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.” (Chancellor of the Exchequer)
A Generous Increase to Universal Credit Childcare Support for Working Parents — & it’s Pre-Funded!
The proposed childcare support obtained by eligible families through Universal Credit is also very generous. Families who are eligible for this particular scheme previously had to pre-fund the childcare costs and then claim them back. This meant that families, many of whom were already struggling, had to first come up with a significant chunk of money — in advance. That cash flow challenge was a real issue for many low-income families who were otherwise eligible. It’s no wonder, therefore, that only 13% of them have been claiming this form of childcare support.
With the new changes, however, the Government will pre-fund the childcare support available through Universal Credit in certain circumstances. Upfront funding should make a huge difference to the viability of the scheme for many who would otherwise struggle.
Even better, though, are the rates of funding that’ll be available from July 2023. Eligible families can claim back up to 85% of their childcare costs currently, up to a maximum figure. According to the Spring Budget announcement, that maximum attainable will rise, from July 2023, from £646 per month for one child to £951 per month. For two children it will increase from £1,108 per month to £1,630. That’s almost a 50% increase in both cases and should be welcome news for eligible families. Early indications are also that the amounts may increase each year by the Consumer Price Index (CPI), until 2027-28. Learn more about childcare funding through Universal Credit in our guide here.
Wraparound Care — Childcare Funding for Working Parents of School-Age Children
For parents of school-age children, a common difficulty arises where the child’s school day is shorter than the parent’s working day. For example, children may turn out from school at, say, 3 O’clock but parents may not leave work until 5:30 pm. In our example, that leaves at least 2½ hours — or more with travel — where childcare provision will be required. Similar mismatches between school and working hours may also arise at the start of the day. Finding and affording childcare during those mismatched hours is a real problem for many.
To counter this, another of the Chancellor’s announcements in the Spring Budget 2023 is to extend what’s known as ‘Wraparound Care’ for school-age children. In the new ‘Pathfinder’ approach to Wraparound Care, Government-backed childcare funding will cover childcare hours at the start and finish of the day. Parents will then be able to work for full days and not have to worry about the costs and practical challenge of childcare provision before the start and after the end of the child’s school day.
The Government will be running a pilot scheme for this new initiative over the course of the next 18 months. If successful, Wraparound Pathfinder Childcare funding will cover the time from 8am until the start of the school day and from 3pm until 6pm at the end of day, beginning in September 2024.
These new measures “will help with the cost of living, support education for the youngest children, and remove one of the biggest barriers to parents working.” (Chancellor of the Exchequer)
Funded Childcare at Leaps & Bounds Nursery, Edgbaston, Birmingham
We support all free childcare funding options for eligible families at our Edgbaston nursery/pre-school
Leaps & Bounds supports all current Government-funded childcare schemes for eligible families at our nursery and preschool in Edgbaston, Birmingham. We are a childcare provider offering high quality weekday childcare for babies, toddlers and under-fives and are also conveniently close for families in Harborne, Ladywood, Bearwood and Smethwick. If you’d like us to show you and your little one around, or if you’d like to register your child for a place, please get in touch using one of the options below.
The information above is given in good faith and, to our knowledge, is correct at time of writing (March 2023). However, please do your own research in case things change after publish date.