Chancellor of the Exchequer Rishi Sunak has put on hold business rates for for rateable values under £51,000 for 12 months, as part of a package of measures to support the UK economy in the face of disruption from the coronavirus outbreak, but the list does not include nurseries.
Interviewed this morning Mr Sunak defended his decision not to include nurseries, saying, 'Because what we’ve done on business rates is target the sectors of the economy which are in the consumption side of the economy, which will see a very significant hit because of people’s inability to spend. And what we wanted to do is make sure that they don’t go out of business during that period of time.'
Any company eligible for small business rates relief would also be awarded a £3,000 cash grant, representing a £2bn injection for 700,000 small businesses across the country.
While small nursery businesses could be eligible for a £3,000 grant, few other benefits for the sector were mentioned in the Budget.
The Chancellor also set out a raft of measures in response to the coronavirus outbreak, including £2billion of sick-pay rebates to cover up to 2m small businesses with fewer than 250 employees.
He added that the cost of a business having someone off work for up to 14 days would be refunded.
The Budget also promised a new Coronavirus Business Interruption Loan Scheme, which would see banks offer loans of up to £1.2m to support small and medium-sized enterprises (SMEs).
Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said the measures were not specific enough to reassure the early years sector.
‘Nurseries are fearful that any temporary closure as a result of coronavirus outbreak may push them out of business altogether. This risk appears to be uninsurable and they need support now,' she said.
‘But no specific support for childcare businesses has been announced. Parents rely on these businesses. The children and families Minister Vicky Ford told Parliament today that nurseries were a top priority and she was working towards minimising the impact of any closure. She promised an announcement soon but nothing was mentioned in the Budget.
‘We appreciate the statutory sick pay refund which will help most nursery businesses and the loan scheme is useful for cashflow problems but must be paid back. What compensation can be made available to them if they are forced to shut?’
Other early years organisations were similarly disappointed by the lack of any more specific support for the early years in the Budget.
Neil Leitch, chief executive of the Early Years Alliance, said, ‘We’re incredibly disappointed and frustrated by the lack of any reference to the early years in today’s Budget.
‘The Government knows that the early years sector is woefully underfunded; that every month, hundreds of nurseries, pre-schools and childminders across the country are being forced to shut their doors because they simply cannot make ends meet any longer; and that many of those providers managing to stay open are being forced to charge parents higher fees for extra hours or additional goods and services to plug the growing funding gap – and yet still it chooses to ignore this problem.
‘The current situation simply isn’t sustainable, and with the national living wage projected to increase to £10.50 an hour by 2024, things are only going to get worse.
‘Today was a chance for the Government to commit to tackling the childcare funding crisis once and for all. Ultimately, it will be parents and providers who will pay the price for this missed opportunity.’
To qualify for small business rates relief, and the £3,000 in cash promised by the Chancellor, a property must have a rateable value of less than £15,000.
The Chancellor also promised a review into the long-term future of business rates, which Ms Tanuku warned must consider nurseries as separate entities.
‘The forthcoming promised review must take into consideration the injustice of imposing business rates designed for factories and shops on nurseries which have space to support children’s development, education and well-being,’ she said.
Teaching unions also said that more funding was needed for schools and maintained nursery schools.
Dr Mary Bousted, joint general secretary of the National Education Union, said, ‘While the Government obviously needs to address the short-term challenge of the coronavirus crisis, it must begin to plan for the long term as well. This Budget does not support a long-term plan for the millions of young people being educated within a chronically underfunded system.’
She added, ‘The £7.1billion already promised for schools over the next three years should have been increased. It is welcome but it falls well short of the £12.6bn needed to replace the cuts since 2015, let alone provide a world-class education for every child. 83 per cent of schools will be worse off this April in real terms than in 2015.
‘Maintained nurseries continue to survive hand to mouth, with many under threat of closure, and 16-19 education continues to be suffer as well.’
Chief executive of Child Poverty Action Group, Alison Garnham, added, ‘It is within the Government’s power to spread opportunity more evenly across the UK and to enable struggling families to get on, but unless funding is restored for Universal Credit and for children’s benefits, investment in infrastructure will have limited effects. This Budget was an opportunity to begin to slow the rise in child poverty, but there was no evidence today that low incomes are the priority that they should be in any effective strategy to level up the country and boost the economy.
‘The Government could lift seven hundred thousand children from poverty by 2023 if it restored support for children in Universal Credit to its 2013 value, added £5 to child benefit and removed the two-child limit and benefit cap. That would begin to level up those children and to send a strong signal to struggling families that they have not been forgotten.’
Helen Wong, a corporate partner with Charles Russell Speechlys, said, 'A number of my contacts and clients have expressed real concern and a worry that they will be pushed out of business through the effects of Coronavirus and feeling left out of any real support from the Chancellor’s budget.
'The positives about the budget relate to the NIC increases allowance and statutory sick pay allowance from day one, but such measures may not be enough help.'
