Chancellor to announce multibillion-pound childcare expansion, say reports

A multibillion-pound expansion of free childcare for one and two-year-olds could form part of a surprise announcement in Wednesday’s Budget, according to reports.

The plan, first reported by The Guardian, is believed to include 30 hours a week of childcare for parents in England with children in that age group.

It could also see increased funding for the current childcare programme for three-year-olds.

The move would come amid ongoing concerns about the cost of childcare, amid broader cost-of-living challenges and inflation pressures.

While full details of any expansion would come in Wednesday’s Budget, such a move would chime with the Chancellor’s hopes of getting more people back into the workplace as part of a wider bid to boost growth.

Pressed on the subject of childcare provision over the weekend, Mr Hunt had said: “We would like to help everyone. It’s expensive to do it. You can’t always do everything at once.”

But the Chancellor has come under pressure in recent weeks to act on childcare, which is seen to be among the most expensive in the world.

Labour has promised to completely overhaul the British childcare system, labelling it “broken”.

Alison McGovern, the shadow employment minister, said that any announcement on childcare needed to be part of a “proper reform strategy”.

She told BBC Newsnight: “If we spend Budget Day tomorrow talking about childcare I’ll think that’s a good thing. And I think this is where our agenda needs to be… We need to know much more about how this is going to work.

“This can’t just be a one-day announcement and that’s it we’ll see how it works. We need proper reform.

“This has got to be part of a proper reform strategy because we know that the system’s not working at the moment.”

Nursery providers in England have raised concerns about underfunding, with complaints about the lack of government investment.

Currently all families of three and four-years-old qualify for 15 hours of free childcare a week, over 38 weeks.

Households can qualify for 30 hours of free childcare a week if parents earn the equivalent of 16 hours a week at the national minimum or living wage.

Neil Leitch, CEO of the Early Years Alliance, said the “devil was in the detail” about any plan.

“We know from harsh experience that what can sound like an impressive investment in theory can end up being wholly inadequate in practice, and so understanding exactly how this announcement will translate into hourly funding rate changes, especially in light of the extension of the 30 hours offer to one and two-year-olds, will be key to understanding the impact on the sector,” he said.

James Bowen, director of policy for school and nursery leaders’ union NAHT, said: “While we will need to look closely at the detail, if the Government does increase the hourly funding rates to early years providers this will be welcome news.

“We know that the funding settings currently receive from Government is woefully inadequate and many providers simply cannot afford to operate at those levels.”

Paul Johnson, director of the Institute for Fiscal Studies, said many would welcome any announcement.

But he warned on Twitter the “whole system is hugely complex”.

“As universal support has expanded, targeted support for children most in need has contracted,” he wrote.

Purnima Tanuku, chief executive of the National Day Nurseries Association, warned that providers cannot “magic up” places.

“I think that we need to really see the sums,” she told BBC Newsnight.

“The challenges are at the moment, suddenly nurseries can’t just magic up places all of a sudden because they are in a crisis.”