Alliance criticises lack of support for early years in Spring Statement
By Rachel Lawler
The Alliance has criticised the government for failing to support the early years sector in its Spring Statement.
While the Chancellor announced cuts to fuel duty and VAT on energy-saving measures for households, he failed to introduce any targeted support for the early years sector.
He did confirm that the proposed increase to National Insurance contributions would go ahead as planned, although the threshold will be increased so that employees will only pay them on earnings above 拢12,570, in line with Income Tax as well as a pledge to reduce the basic rate of income tax from 20p to 19p by 2024.
The Chancellor also announced that the Employment Allowance, which benefits small businesses, would increase from 拢4,000 to 拢5,000 in April 2022.
"Frustrated and disappointed"
Neil Leitch, chief executive of the Alliance, commented: 鈥淲e are both frustrated and disappointed that, yet again, the early years sector has been ignored in today鈥檚 Spring Statement announcement.鈥
鈥淢any providers had hoped that the government could use this as an opportunity to reallocate the substantial underspend from the tax-free childcare scheme to the early years sector. However, the government鈥檚 failure to do so means that many early years providers will continue to struggle to make ends meet, and sadly, many will have no option but to close their business.
鈥淭he government also failed to remedy its decision to exclude early years settings from an extension in business rate support despite the fact that retail, leisure and hospitality businesses will continue to benefit from rates relief over the coming financial year. While we know that not all early years providers are subject to business rates, for those that are, this would have provided vital financial help at a time when so many are struggling in the face of rises in the minimum wage and national insurance contributions from next month.
鈥淭oday鈥檚 Spring Statement was an opportunity for the government to address the early years funding crisis but, yet again, it has failed to do so. Ultimately, it is parents and providers who will pay the price."