The Chancellor has promised up to 30 hours a week of free childcare for working parents in England with children as young as nine months. But do you know the detail of the childcare reforms and how they will affect you?

Why we needed childcare reforms

Although parents of three and four-year-olds can claim free hours of childcare, currently that is not the case for those with younger children. Aside from some means-tested discounts for parents on certain benefits, if you want to put your under-threes in nursery, you have to pay, and that is not economically viable for everyone.

Last year, figures revealed that a part-time nursery place (25 hours) for a child under two cost 4% more than a year previously. For a child aged two, it cost 5% more. The Chancellor himself admitted that England has “one of the most expensive systems in the world.”

As such, some people were choosing not to work because they didn’t see any benefit after childcare costs. And this is what Jeremy Hunt says he wants to reverse. He says childcare reforms can help get people back to work.

How the childcare reforms will work

The Chancellor introduced a phased policy, which will be fully introduced by September 2025. Currently, parents of three and four-year-olds in England are eligible for 15 hours of free childcare per week, and working parents with children in the same age group are eligible for 30 hours of free childcare.

Now all eligible households in England with children as young as nine months – where all adults are working at least 16 hours a week – will be entitled to 30 hours a week of free childcare.

The offer of free childcare will be available to working parents of two-year-olds from April 2024. This will cover around half-a-million parents, but it will be limited to 15 hours at first. From September 2024, the 15-hour offer will be extended to children from nine months, which the Government has said will help nearly a million parents.

The full 30-hour offer to working parents of children under five will come in from September 2025.

Where is the childcare coming from?

The Government will provide £4.1 billion by 2027-28 to expand the 30 hours a week of free childcare for working parents of younger children in England. Ministers will also provide £204 million in 2023-24, increasing to £288 million in 2024-25, to raise the hourly funding rate paid to childcare providers in England to deliver the existing free hours offer.

The Chancellor said the Government will pilot incentive payments of £600 for childminders joining the profession, and £1,200 if they join through an agency.

Mr Hunt said the Government will fund schools and local authorities to increase the supply of wraparound care so all school-age parents can drop their children off between 8am and 6pm.

The Chancellor said the Government aims for all schools to start to offer a wraparound offer, either on their own or in partnership with other schools by September 2026.

Is there enough childcare provision and staff for the policy to work?

Early years leaders are concerned nurseries and childminders could struggle to deliver additional places for younger children if the funding provided by the Government does not cover increasing costs.

A number of early years providers have reported struggling financially. And some nurseries have had to close in recent years, due to funding pressures.

Recruitment and retention challenges in the childcare sector could also make the policy hard to deliver. The survey Coram Family and Childcare, released last week, found that only half of local authorities in England said they had enough childcare places for children under two in the childcare reforms.

It also revealed that the number of local authorities in England who report having enough places for the universal 15 hours a week free childcare entitlement for three and four-year-olds has dropped to 73%.

A survey by the National Day Nurseries Association suggests that 98% of nurseries in England say their funding rates do not cover delivery costs and 83% expect to either make a loss or break even.

In some cases, it might be that nurseries and other childcare providers offer the free hours, but request for parents to pay for meals and other elements of care in order to make it work.

Will these childcare reforms work for you? Let us know in the Comments