Nurseries ‘£437m out of pocket’ as a result of Budget

The Chancellor’s Budget will cost the nursery sector a total of £437m next year due to increases in the national living wage and lack of action to reduce business rates and offer more money for funded places, according to evidence presented to MPs. Analysis by the National Day Nursery Association estimates that last month’s Budget will cost each private nursery an average of £42,000 in the financial year from April 2019. The increase in the national living wage, from £7.83 to £8.21 an hour in April, is expected to cost the average nursery an extra £2,550. In total this wage increase will cost the nursery sector £44.2m. Chancellor Philip Hammond’s Budget last month also did not include business rate relief for nurseries, which the NDNA had previously called for. The organisation said that this means the average nursery will incur costs of £10,778 based on 2017 business rates. The national cost to nurseries of this is estimated to be £155m. It also estimates that a lack of extra money to help nurseries meet the cost of providing 30 hours funded childcare to three- and four-year-olds living with working families leaves the average nursery facing a £28,704 shortfall costing the nursery sector as a whole £237m next year. Read more.

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