Welsh Government urged to extend small business rate relief for childcare settings

The Welsh Government is being urged to extend 100% business rate relief for childcare settings until the Senedd elections in 2026.

Early Years Wales, an umbrella organisation supporting the pre-school education sector in Wales, says that providing business rate relief is vital during the current cost of living crisis as it enables providers to offer affordable childcare.

In April 2019, the government’s Small Business Rates Relief scheme was enhanced to provide 100% relief to all registered childcare premises for a three-year period. This has since been extended to March 2025.

In England, where business rate relief is not provided, research carried out by the National Day Nurseries Association (NDNA) found that the budget in April last year caused a 40% increase in bills for nurseries.

This in turn had a negative impact on staff wages and increased the amount of money the nurseries were required to charge for their services.

Better pay

The organisation argues that any increase in costs caused by the removal of business rate relief would have a catastrophic impact on the survivability of the sector.

A survey conducted by Early Years Wales and ARAD in 2022 found that 42% of staff who left the childcare sector did so to find better pay in another sector with 54% of respondents saying that the salary on offer was too low to attract new staff.

David Goodger, CEO of Early Years Wales, said: “Business rate relief is vital to the survivability of childcare settings here in Wales. Existing research shows that many private settings are struggling with the current cost of living crisis, meaning that Business rate relief frees up vital funds allowing settings to continue paying their staff and providing a crucial service to their local community.

“Ensuring childcare is available to and accessed by the most disadvantaged children and families in our society is vital. This is an important aspect of realising the Welsh Government’s anti-poverty strategy and championing social justice.”