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Treasury fails to target early years in Budget

By Rachel LawlerRishi Sunak

Chancellor Rishi Sunak failed to provide any any specific financial support packages for the early years sector as he outlined his plans in the latest Budget today.

The update comes shortly after new research from the Alliance and analysts Ceeda found a £247 million funding shortfall for early years providers in the spring term.

"Unncessary closures"
Neil Leitch, chief executive of the Alliance, commented: "Given the vital role early education and childcare providers will play in the UK’s short and long-term economy recovery, it is both disappointing and hugely frustrating that today’s Budget did not include any specific financial support packages for the early years.

"While the extension of the business rates holiday will provide welcome relief to some providers, this is only one piece of a very complex financial puzzle, and there are many in the sector who will not benefit at all from today's announcement. 

"With early years attendance levels still well below normal, and ongoing additional costs associated with coronavirus, urgent help is needed to ensure our vital sector can continue delivering quality care and education to the children and families that need it.

"Limited financial support throughout this crisis, combined with years of sector underfunding, has already led to the unnecessary closure of nurseries, pre-schools and childminders across the country. Without urgent action, this trend will undoubtedly continue. That is why, on top of emergency support during the pandemic, government must undertake a full review of early entitlement funding to ensure that the sector is able to remain sustainable in the long term. 

"Countless reports show that if the Treasury really wants to reduce long-term spending, investment in the early years sector is an investment that is proven to last a lifetime. I cannot understand why this government is so unwilling to accept that."

Job Retention Scheme
The Job Retention Scheme, or furlough, will be extended until the end of September 2021. The scheme was previously due to close at the end of April but many sectors that rely on it are still facing restrictions and disruptions due to the pandemic.

From July onwards, employers will be expected to pay for 10% of workers’ wages, rising to 20% in August and September

Self-employed scheme
The governments support scheme for the self-employed (SEISS) will also be extended until September 2021.

The scheme will also be extended to include those who became self-employed in 2019-20 and were previously ineligible for support.

Business rates
The government will continue to offer 100% business rates relief after 1 April 2021, with the relief extended until 30 June 2021. The Treasuy has confirmed that "nurseries will also qualify for relief in the same way as other eligible properties".

Universal Credit
Elsewhere, the Treasury will also be extending the £20 a week increase in Universal Credit payments, but for some families this will be made as a one-off payment of £500.

Employer support
The Chancellor also promised additional funding for its Kickstart scheme for unemployed workers aged under 25 and its Restart scheme aimed at older workers.

The Treasury will also be increasing payments to employers who employ apprentices with a payment of £3,000 for each new apprentice hired between 1 April and 30 September 2021.

Find out more
Covid-19 business advice - for early years providers