Budget 2021 response: Early Years Alliance

Commenting on the Budget, Neil Leitch, CEO of the Early Years Alliance said:

"While any increase in funding is more than many in the early years have come to expect, the commitment announced today goes nowhere near what is needed to safeguard the future of the sector.

"With huge rises in national living and minimum wages set to come into effect next April, alongside increases in national insurance contributions, the cost of delivering early years places is set to soar, and the harsh reality is that the investment announced today – likely to amount to little more than a few pennies extra per hour for early years providers – won’t come close to covering this.

"As a result, nurseries, pre-schools and childminders are still likely to face a choice between increasing fees or risk going out of business altogether, meaning parents across the country are likely to face a significant hike in childcare costs at a time when the government is supposed to be tackling the rising cost of living.

"Worse still, government’s failure to ensure that funding keeps pace with rising costs will make it all the more difficult for providers to continue delivering quality early education at a time when young children need more support than ever. We know that interventions in the early years are the most effective way to help level the educational playing field and reduce the disadvantage gap, so if the government is genuinely committing to ‘levelling up’, it needs to start funding our vital sector adequately.

"The private government documents uncovered by the Alliance’s Freedom of Information request revealed a £2.60 per hour shortfall in funding rates for three- and four-olds. Extra pennies simply aren’t going to cut it.

“The government must invest what is actually needed to ensure settings can continue delivering affordable, accessible, quality care and early education without risking their own sustainability. Today was a missed opportunity to do just that."


Commenting on the news that there will be a new 50% business rates discount for the retail, hospitality, and leisure sectors, but not for the early years sector, Neil said: 

“While we know that not all early years providers are subject to business rates, for those that are, inclusion in the business rates discount announced today would have been a huge financial help at an incredibly difficult time.

“Given that early years settings were  – belatedly – included in the rates relief offered during the pandemic, it makes no sense that our sector is now being excluded from this important support.

“We urge the Chancellor to review this decision and ensure that nurseries and other eligible providers are included in this policy without delay."