Childcare providers in England should get 100% business rates relief to reflect the mounting cost pressures on the sector, says the Federation of Small Businesses.
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.
Exempting nurseries from business rates would cost the Government about £120m a year, says the FSB, and would reflect rules already in place in Scotland and Wales.
FSB National Chairman Mike Cherrysaid: “The business rates system remains regressive and is not linked to a business’ ability to pay. While we’ve worked 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, 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.
“These small nurseries and pre-schools want to be able to continue to provide high-quality childcare, but are being scuppered by ever increasing costs. It is 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.”