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NEWS: PACEY responds to the Autumn Budget 2021

This afternoon (27 October) Chancellor of the Exchequer Rishi Sunak announced his Autumn Budget and Spending Review in the House of Commons. We have set out some of the key updates below.

Supporting families and children

As announced in a pre-briefing, the Chancellor set out a package of support for families and children, including:

  • An extra £200m investment in the Supporting Families programme, benefitting up to 300,000 additional families
  • £80 million to create an additional 75 family hubs across England

  • £100 million towards supporting the mental health of expectant parents

  • £120 million towards other comprehensive family support programmes

​You can read our earlier response to this package of support here.

Investment for early education and childcare

The Chancellor made brief mention of new additional funding to support providers delivering early education entitlement. Each year from 2022/23 to 2024/25 providers will receive significant increased funding, rising to an additional £170 million in 2024/25. 

Update 28/10/21: The funding allocation has now been confirmed by Children and Families Minister Will Quince MP as £160m in 2022-23, £180m in 2023-24 and £170m in 2024-25, "for local authorities to increase hourly rates paid to childcare providers". 

The Chancellor also re-announced the £150 million to support training and development for the entire early years workforce.

Business rates relief will continue at 50% for the next year for just the retail, leisure and hospitality sectors. Early years and childcare providers will not benefit from the same support.

Change to Universal Credit and National Living Wage

As Universal Credit (UC) claimants work, they lose a portion of their UC claim, known as the taper rate. Currently the UC taper is 63%, so for each pound earned, the individual keeps 37p. From no later than 1 December 2021, this taper will be reduced by 8% down to 55%, meaning individuals will keep 45p per pound. The Chancellor estimated that this measure will mean 2 million families will be £1,000 better off each year. This move was one of the measures set out in our joint letter to the Chancellor yesterday. 

The Chancellor also confirmed that from 1 April 2022, employees over the age of 23 will see a rise in National Living Wage, or minimum wage if they are below this age.

Responding to the announcement, Liz Bayram, Chief Executive at PACEY comments:

“The Chancellor has acknowledged the importance of a child’s earliest years in his Budget Statement today as well as the importance of support from children and family services, including childcare and early years. The commitment of an increase in funding over the next three years, for providers delivering early education entitlements, is most welcome. PACEY understands that annually the increase will be significant, rising to £170m by 2024/25. Given the funding challenges that so many providers are facing, this is both good news and a relief as it will help to offset rising costs including increases to the Living Wage.

“We now await the detail of this funding allocation from the Department for Education and hope this is the start of Government’s efforts to address the sustainability concerns that registered childminders, pre-schools, and nurseries are battling right now. PACEY remains focussed on persuading Government to undertake a thorough review of all early education and childcare funding before the next election, so we can ensure the system works better for families and providers.”

You can read the Autumn Budget 2021 in full here