Review recommends Scottish Government exempts nurseries from business rates 

NDNA is delighted that a review is recommending the Scottish Government remove business rates for nurseries and urges the government to implement this.

Early years settings in Scotland have been particularly badly hit with soaring business rates which could put some nurseries out of business.

There were also real fears that these costs would be passed onto parents in the form of higher fees, making a return to work unlikely for many.

Following NDNA’s lobbying of the Scottish Government, submission of evidence and a high-profile petition, the Barclay Review on Business Rates today recommends nurseries no longer pay the rates.

Purnima Tanuku OBE, Chief Executive of NDNA, said: “We are absolutely delighted that our concerns have been heard and the evidence carefully looked at.

“Our case was that the high business rates will increase fees for parents and would lead to some providers having to close because they are unable to balance their books.

“This recommendation sends out a positive message to all childcare providers who are looking at how they can deliver expanded free early learning and childcare which will be brought in over the next few years.

“Nurseries are particularly badly hit with high business rates as they tend to have large properties with plenty of space for children to play. But years of government underfunding for ‘free’ places along with other rising costs such as National Living Wage and pension auto enrolment has left many providers in a precarious position.

“We urge the Scottish Government to accept this recommendation which we hope will be a signal to the rest of the UK as a sensible way forward for the early years sector.”

In June, NDNA network chair Stephanie Dodds handed her petition to scrap business rates for childcarers to MSPs who debated the issue within the Scottish Parliament.

The Public Petitions Committee at Holyrood wrote to the Government, local authorities, the Voice Union and Parenting Across Scotland about the issue. 

Stephanie, accompanied by NDNA director Claire Schofield, told the committee that nurseries in Dundee and Aberdeen were facing increases of around 50%, while in Edinburgh, increases could be 70% or more.

One nursery in Renfrewshire was said to be facing a 215% rise, while in Edinburgh the highest increase is 147%.

The strongest comments from the petition came from parents, who made up 69% of the respondents, concerned that costs from increased business rates would be passed onto them. For many, this meant that it wouldn’t be viable for them to use childcare and return to work.

Stephanie said: “A key issue for nurseries, like all small businesses, is balancing our books so we can deliver high-quality early learning and childcare, whilst remaining sustainable and keeping fees affordable for parents.

“Many private nurseries are facing financial crises as a result of rising business rates coupled with chronic underfunding.”

NDNA Scotland’s annual survey 2017 reported that, due to rising business costs, more than half of nurseries expected to break even or make a loss.

Purnima added: “Scrapping business rates altogether for nurseries will make a huge difference to their outlook and their ability to offer funded hours.

“However, there should be no restrictions made on their assets so nursery businesses will be free to buy, sell and expand. This should also apply to all nurseries.

“We applaud the Scottish Government for working with the sector in order to make sure their Early Learning and Childcare Policy can be delivered by all sections of the sector. This should give parents the choice, flexibility and quality they need to make a real difference to children’s lives.

“Rising business rates is counter-intuitive to the aim of the Blueprint for Expansion which ultimately aims to strengthen the economy and encourage more people into work. We are sure that the Scottish Government will reach a sensible decision.”  

Details of the review can be found here