Autumn Statement Contains Little Support for Childcare Sector
It has been quite challenging to keep up with the changes to financial policy lately. The Truss Government began with its mini-budget in September, which promised a radical slew of changes, aimed at reducing the tax burden and spurring growth. However, without being able to explain how the changes would be funded, the government found itself badly spooking the markets and it quickly became clear that the agenda was a non-starter. Truss first sacked Kwasi Kwarteng, as Chancellor and then resigned herself, ushering in the new Prime Minister Rishi Sunak after a short leadership competition.
Jeremy Hunt, whom Truss had appointed to replace Kwarteng and who was kept on by Sunak has set about trying to repair the situation. It is a daunting task. Both the Conservatives and Labour agree that there is a hole in the country’s finances that amounts to £10s of billions (though naturally they disagree about how it got there). To put that in context, the entire budget for subsidised childcare in England is about £6 billion. In November, Hunt announced a series of financial changes, raising taxes and identifying areas for future spending cuts.
While more funding has been announced for schools, for the childcare sector, there was little to celebrate. With inflation running high, an analysis by the IFS suggests that funding will see a real terms cut of around 8% due to high inflation, and there has been no indication of any further support, such as reducing or removing business rates. Sector organisations have vowed to up their efforts to put pressure on the government to do more to ensure the future of the childcare sector.