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Call for business rates relief scheme to help struggling childcare sector

Date published: 26 April 2019


The Federation of Small Businesses (FSB) is calling for a new 100% business rates relief scheme for childcare providers in England, reflecting the mounting cost pressures on the sector.

With rising staff costs and an increasing funding gap for the 30 hours free entitlement, property-dependent childcare businesses are coming up against spiralling business rates bills.

Introducing a rates relief discount, fully funded by central government, would not only give recognition to the cost pressures for those in the sector, but also support the delivery of affordable childcare and the 30 hours free entitlement. 

FSB Development Manager, Robert Downes, said: “The business rates system remains regressive and is not linked to a business’ ability to pay.

"While FSB has lobbied hard for rates discounts this year, a huge amount of further reform is needed. Most small business owners have seen an increase in their operating costs in the last few months, and the childcare sector is no exception, in fact it’s among the worst affected.

“The vast majority of childcare providers are small, independent set ups which must meet strict requirements; maintaining staffing levels, having a certain amount of space on site, paying for up-to date training and being able to deliver the 30 hours entitlement. On top of this, utilities, rent and business rates bills are placing significant pressure on their costs.

Exempting nurseries from business rates would cost the Government approximately £120m per year. A rates relief system has been put in place by both the Scottish and Welsh governments which exempts nurseries from rates.

Tina Knight, who runs Wells House Nursery in Radcliffe, Bolton, commented: “Small nurseries like mine want to be able to continue to provide high-quality childcare, but we are being scuppered by ever increasing costs.

“It’s time for the UK Government to step up and alleviate the pressure by bringing in 100% rates relief scheme in England, as has been done already in Scotland and Wales. Quality early years education is absolutely crucial for our young people to get a good start in life, but we are on the brink of a crisis of provision with an alarming number of small, independent nurseries closing.

“A business rate relief scheme would be the biggest help for our sector, and one that could make a difference really quickly, particularly as time is of the essence.”

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