Budget 2023: What This Means For Parents

Today's Spring Budget announcements have included a swathe of helpful changes to childcare!

This is well worth a read as it affects so many of the mummies and daddies in our community.

The Chancellor, Jeremy Hunt, has unveiled the Spring 2023 budget - there's a lot to unpack with some huge changes incoming in order to 'level up' the UK economy. We've broken the announcement down and picked out the most relevant parts that impact our parenting community.

One of the most significant focuses of the Spring Budget has certainly been the childcare system - something that parents have been campaigning for for years! Well, it's safe to say, we are finally being listened to, and these changes could be life changing for many families.

These changes are set to be put in place from April 2024 onwards.

Changes to Childcare Ratio Rules..

The allowed ratio of children to adults in childcare settings has changed to allow more children per adults for 2 year olds, from 1:4 to 1:5. Nothing about the ratio for older children or 1 year olds has yet been announced.

What are the current rules around childcare ratios?

The current ratio rules in England for nurseries are:

Under 2s: 1 adult for every 3 children
Aged 2: 1 adult for every 4 children
Aged 3 and over: 1 qualified adult for every 13 children or 1 unqualified adult for every 8 children

In Wales, the ratios for nurseries are:

Under 2s: 1 adult for every 3 children
Aged 2: 1 adult for every 4 children
Aged 3-7: 1 adult for every 8 children
Aged 8-12: 1 adult for every 10 children

In Scotland, the ratios for nurseries are:

Under 2s: 1 adult for every 3 children
Aged 2: 1 adult for every 5 children
Aged 3-8: 1 adult for every 8 children (in settings where children attend for fewer than 4 hours in any one day, the adult to child ratio can be 1 adult for every 10 children)
Aged 8 and over: 1 adult for every 10 children

In Northern Ireland, the ratios for nurseries are:

Under 2s: 1 adult for every 3 children
Aged 2: 1 adult for every 4 children
Aged 3-12: 1 adult for every 8 children

The government gives nurseries the power to have a smaller ratio depending on the needs of the children and their own preferences, as long as it does not drop below the legal minimum.

How will ratio rule changes affect childcare?

This change means that nurseries will be able to charge less, as each member of staff will be responsible for more children, meaning that nurseries will be able to keep their prices down.

Many parents are worried that this rule could impact the safety and learning of their children due to there being more children per adult. Some research and studies have found that lower ratios can imporve learning, this is tenuous, with other studies being inconclusive. Other elements can be very beneficial; space to play outside, nap areas and personal & professional development incentives for workers being contributors to a child's learning and overall development. As the ratio change isn't drastic, and as nurseries can make exceptions for children with extra needs, we would expect that safety was taken into consideration before this change was approved.

Childcare payments on Universal Credit change

The amount that parents who recieve Universal Credit can claim back for childcare will increase from £646 for a single child to £951, a boost of £304 more per month, and from £1108 for two children on the claim to £1630, a boost of £522 more per month! This hasn't been increased within the last two decades so parents are thrilled. Upfront payments for childcare for some families will also become available rather than parents having to pay in arreas before sending proof to Universal Credit - eligibility for this will be confirmed soon.

Funded Childcare extended to YOUNGER children!

Only parents of eligible 3 and 4 year olds are currently able to access the 30 hour funded childcare, with children aged 2 onwards in receipt of Disability Living Allowance eligible for 15 funded hours.

Today's announcement means that ALL children in England over the age of NINE MONTHS and under 5 years old will be able to access the 30 hour per week childcare funding, as long as both parents are working. It will be phased - Martin Lewis has detailed this below.

In eligible homes where all adults work 16+hrs. Plan is 30hrs childcare a week in Eng for 9mths to school age (Eng only, but funds to other UK nations). It'll be phased

-April 24, 2yr olds 15hr/wk
-Sept 24 all 9mths-3yr 15hrs/wk
-Sept 25 all 9mth to school 30hrs/wk#budget2023
— Martin Lewis (@MartinSLewis) March 15, 2023

£600 childminder pilot scheme announced

A £600 pilot scheme to encourage new childminders will be implemented. This will rise to £1200 for agency workers.

Also, as an incentive to entice new staff into the childcare sector, the government will also be offering a £500 one-off bonus payment to childcare workers! It'll be part of a pilot scheme, after settings widely reported issues in finding staff to fill roles.

Wraparound care scheme

All school aged children should be able to access a full wraparound care offer, by September 2026, under the Budget reforms! Increased funding will be given to provide this.

Energy price cap increase scrapped

Whilst this isn't related to the childcare changes we've talked about, it's still an important announcement for parents - keeping our children warm has been a big concern for so many of us.

The energy price guarantee was set to go up from £2500 to £3000 in April - it will now stay at £2500 until the end of June. Energy prices are due to drop in July. Households on pre-payment meters will have their charges brought in line with 'comparible direct debts'.

Swimming pool and leisure centre fund announced

£63 million fund has been created to ensure swimming pools and leisure facilities can stay open for families to use! This is great news for families who enjoy swimming and rely on these leisure centres for sports clubs during the school holidays, as well as swimming lessons.

Fuel Duty Frozen

Fuel duty has been frozen, maintaining the 5p cut and saving families a lot of money (around £100 a year) in transportation costs which is always welcome.

Interest rates set to drop

Rates are predicted to drop to 2.9% by the end of 2023, down from over 10%. This is excellent news, as the cost of living is so directly impacted by high interest rates.

Our verdict...

It's been a long time coming, with parents desperate for more help with childcare feeling like they're left with no choice but to stop working, and organisations like Pregnant Then Screwed spearheading campaigns to get these changes. Well, the people have spoken - and they've been listened to!

However, there are concerns that this now means that families who get some universal credit to top up their overall income will be impacted. Currently, a 'lead' parent of a child under 3 isn't expected to work but they do have to attend appointments and 'prepare' for a return once their baby turns 1. With the 30 hour funding being extended to 1 year olds, some mums are worried they'll be hauled into appointments as soon as their maternity leave ends, even if they would prefer to have a little longer with their baby before returning.

On the other hand, parents who have been very worried about an employment gap, and who've been itching to get back into work, will now be extremely pleased that they'll find it financially more viable to do so, thanks to the reforms.

Overall, we like what we're seeing with the 2023 Spring Budget, and hope it'll make a huge positive impact upon families.

Cover image credit: OlekStock from Getty Images via Canva Pro License

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