Scrap business rates for nurseries, says small business organisation

For a new report, Handle with care, the business organisation carried out detailed interviews with providers throughout the country to gauge the impact of the 30 hours scheme on small providers’ businesses, and found that many are struggling with rising and unsustainable business costs as a result of the scheme.

Small childcare providers in particular are bearing the brunt of rises to business rates, operating costs and staff wages.

Businesses reported a significant shortfall between the amount of local authority funding they received for the 30 hours, and the fees that the provider recoups from parents, forcing many to supplement by introducing or increasing the cost of ‘extras’ like nappies or a cooked lunch, or per session of unfunded hours.

Recent increases to the National Living Wage and employer contributions to pensions auto-enrolment are further exacerbating this shortfall, putting a halt to investment and leaving nursery owners reconsidering their future.

The FSB is calling on the Government to urgently review the funding rates and follow this with annual evaluations to reflect the changes to the cost of the business.

To help nurseries cope with cost pressures, it says that the Government should create and fully-fund a new 100 per cent business rate relief scheme for childcare providers in England, which would recognise the cost pressures on the sector.