2023 Budget Pledges Free Childcare

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Photo Credits - Markus Spiske via Unsplash

Free childcare is in progress. Earlier in March, Chancellor Jeremy Hunt announced the 2023 Spring Budget which has brought several changes to government spending going forward. Among the topics discussed, the speech delivered to outline the budget mentioned the extension of the current government-provided free childcare.

Currently, the UK government provides 30 hours of free childcare for children aged 3 to 4 years old. Although this has been significant support for working parents, parents with children under 3 years old were not able to claim free childcare.

To motivate parents to return to work to reduce economic inactivity, the government has extended the free childcare scheme to include now children aged 9 months to 3 years.

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Details on the Free Childcare Scheme

The official document mentions that there are around 435,000 individuals in England with children below 3 years old who have become economically inactive to accommodate childcare. It is also stated that many would like to work but they are limited in their ability to finance childcare.

Thus, the government has decided to extend the free childcare scheme. This scheme will provide 30 hours of free childcare for 38 weeks in a year. The scheme will apply to working parents with 9-month to 3-year-old children in addition to the existing scheme that provides childcare for 3 to 4-year-olds.

The scheme will begin in April 2024 on a phased rollout. The first phase will introduce 15 hours of free childcare for 2-year-olds and extended to include 9-month-olds and older in September 2024. The rollout of the scheme is expected to be completed by September 2025, and the 30 hours of free childcare will apply to all parents aged 9 months to 4 years then.

The Impact of the Scheme

A survey by Indeed UK found that the scheme will affect the employment of parents in the UK. 65% of parents said that free childcare would motivate them to seek more work, which is further shown that 77% of parents gave up employment due to the cost of childcare. For working parents who earn under £15,000 a year, they have admitted to planning on doubling their working hours once the scheme is in place.

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From this, it can be said that the scheme will benefit the UK workforce as many will be returning to work. Economic inactivity is expected to reduce, as many parents will now be more comfortable taking more hours as they have childcare sorted.

However, there are also concerns about the impact this scheme will have on the childcare workforce. As it stands, according to researchers at IFS, there has been a long-term decline in workers in the childcare sector. This is a significant concern as there may not be a capacity for more children to be taken into the childcare system now. IFS researchers predict that by 2027, England may need an additional 65,000 30-hour childcare providers. Although the extension of free childcare is welcomed by many, the implementation should consider how this may impact both working parents and childcare providers.

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