Jeremy Hunt to announce £4bn expansion of free childcare

Chancellor Jeremy Hunt is set to announce a multibillion-pound expansion of free childcare to parents of one and two-year-olds in Wednesday’s Budget.

The plan is believed to include 30 hours a week of childcare for parents in England with children in that age group, with only parents with three and four-year-olds currently eligible.

The move could also see a £288m increase in funding for the current free childcare programme for three-year-olds by 2024-25, according to The Guardian.

The Treasury has not denied that the hourly rate the government pays to childcare providers will also be increased, and that councils will be given more money to set up wraparound childcare provision from September 2024.

Mr Hunt is also reportedly ready to bring in changes to the staff-to-child ratios for two-year-olds, with one carer for every five children rather than four in a bid to bring down costs.

At an estimated cost of £4bn, the bold package would come amid ongoing concerns about the burdsome cost of childcare on families amid broader cost of living challenges.

While full details of any expansion to come during the 12.30pm Budget announcment, such a move would chime with the chancellor’s hopes of helping more parents back into the workplace.

Pressed on the subject of childcare provision over the weekend, Mr Hunt had said: “We would like to help everyone. It’s expensive to do it. You can’t always do everything at once.”

The Treasury has already announced plans to increase the £646-a-month cap on support for parents on universal credit by several hundred pounds, and pay the support up front instead of parents having to claim it back.

The chancellor has come under pressure in recent weeks to act on childcare – among the most expensive in the world – to rival Labour’s offer of a radical overhaul ahead after the next general election.

Labour has promised complete reform of the system, labelling it “broken”. Alison McGovern, Labour’s shadow employment minister, said any announcement needed to be part of a “proper reform strategy”.

She told BBC Newsnight: “If we spend Budget Day tomorrow talking about childcare I’ll think that’s a good thing … We need proper reform. This has got to be part of a proper reform strategy because we know that the system’s not working at the moment.”

Nursery sector bosses – who have raised concerns about underfunding – were cautious on the Hunt plan, saying they would have to “look closely at the detail”.

Currently all families of three and four-years-old qualify for 15 hours of free childcare a week, over 38 weeks. Households can qualify for 30 hours of free childcare a week if parents earn the equivalent of 16 hours a week at the national minimum or living wage.

Neil Leitch, CEO of the Early Years Alliance, said the “devil was in the detail” about expansion any plan. “We know from harsh experience that what can sound like an impressive investment in theory can end up being wholly inadequate in practice,” he said.

James Bowen, director of policy for school and nursery leaders’ union NAHT, said: “While we will need to look closely at the detail, if the government does increase the hourly funding rates to early years providers this will be welcome news.

”We know that the funding settings currently receive from government is woefully inadequate and many providers simply cannot afford to operate at those levels.”

Paul Johnson, director of the Institute for Fiscal Studies, said many would welcome any announcement. But he warned on Twitter the “whole system is hugely complex”.

“A universal support has expanded, targeted support for children most in need has contracted,” he wrote.

Purnima Tanuku, chief executive of the National Day Nurseries Association, warned that providers cannot “magic up” places. “I think that we need to really see the sums,” she told BBC Newsnight.