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NEWS: Budget 2023 – How the “free childcare” plans affect class providers

In his recent Budget 2023 speech in the House of Commons, The Chancellor, Jeremy Hunt, has announced that 30 hours of funded childcare is to be put in place for babies and toddlers aged 9 months – 4 years.
We discussed this news with the class providers (for 0-5 year olds) who list their businesses on Happity. They shared with us what they thought about this news, and how they thought this would affect both the sector and young families.

The key points from the Budget 2023 announcement

  • 30 hours of free childcare will be available for every child over the age of 9 months with working parents by September 2025. Eligibility will match the existing 3-4 year-old 30 hours offer.
  • This will be introduced in phases. 15 hours of free childcare for working parents of 2-year-olds coming into effect in April 2024. 15 hours of free childcare for working parents of 9 months – 3 years old in September 2024.
  • The funding paid to nurseries for the existing free hours offers will also be increased by £204 million from this September rising to £288 million next year.
  • Schools and local authorities will be funded to increase the supply of wraparound care. Parents of school age children can drop their children off between 8am and 6pm – tackling the barriers to working caused by limited availability of wraparound care.
  • Childcare providers will now have the option to change minimum staff : child ratios from one 1:4 to 1:5 for two-year-olds. This is to give childcare providers more flexibility in how they operate and bring England in line with Scotland.


Budget 2023 -image shows a baby class for 0-5 year olds, with toddlers playing parachute games with their parents


What are class providers for 0-5 year olds saying about the Budget 2023 announcement?

We shared the news with the 3.4k members in our children’s activity provider Facebook group.  There were an assortment of opinions, with a variety of those who both saw the positives and negatives that could come from this change.

“This concerns me greatly,” says one provider.

“For several reasons! (Firstly) the effect on our sector with fewer children. Mothers aren’t going to commit to a group if they are returning to work so soon. Even if they work part-time they are less likely to want to tie up their few days off. (Secondly) the pressure from extended family and the benefits agencies. ‘There’s free childcare, why aren’t you working?’. (Thirdly) the pressures on the childcare providers to ensure they give quality care to younger children with increased ratios.”
“I think it’s great,” says another.

“Just hoping all properly funded with appropriate ratios and a plan for how to recruit skilled early years practitioners who are paid a fair rate for the tough job they do. But as a mum who went back to work flexibly when my kids were 1, this would have been amazing! Here’s hoping it means parents have a few more pennies to spend on our sector on their days not at work…”


Our class providers have also stated the following:

“Whilst it’s great news for families struggling with the costs of childcare, as a business owner who relies on parents working part-time or not at all choosing to attend classes on their day off, it concerns me. I already have a drop in 3 year olds who suddenly go to nursery for 30 hours a week as soon as funding comes in because they can.”
“‘I’m wondering how they’ll combat the current recruiting crisis in early years provision to be able to offer so many spaces. Its underfunded and overstretched so this makes a nice soundbite but what will the reality be?”
“If I read correctly, only schools and local authorities will get funding for wrap around care? People who use a childminder or nanny won’t be able to benefit from this. This will have an effect on where parents choose for their wrap around care, which affects small ‘one person’ businesses essentially.”

What happens next?

Whilst we’ve been told the basics of what the government has planned from the 2023 budget, the details will be defined over the coming weeks.

The free childcare for 9 months – 3 year olds will be introduced in phases. Starting in 2024, it’ll be at least a year before we start seeing any of these changes being made.

The conversation will continue in our Children’s Activity Provider Community on Facebook so join us if you haven’t already.  


Happity: Created with baby class providers in mind!

If you are looking for ease and a listing/booking service that’s catered specifically to you (busy parents and small business owners) then you are on the right blog page.

It’s free to list with Happity, and you can offer all sorts of ticket options through our site. Though we also offer cost-effective membership for when your baby class needs an extra boost in its marketing or if you would like access to our provider-catered booking system.

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