Budget 2021: business rates relief extended

Rishi SunakThe Chancellor has today announced a package of recovery measures in his Budget speech including further business rates relief for nursery businesses.

Nurseries in England, along with retail and hospitality businesses, will have a business rates relief extension until end June 2021, then a two thirds discount until March 2022. 

The Coronavirus Job Retention Scheme will be extended until end of September across the UK, with employees contributing 10% in July and 20% for the final two months in August and September.

There were some other measures which could support childcare businesses, including increased bonuses for employers who take on apprentices and more support for investment, but nothing specific to help support the struggling sector.

NDNA had lobbied hard for the rates relief to continue but also for recovery funding for nurseries.

Purnima Tanuku OBE, Chief Executive of NDNA, said “The news that the Chancellor will not be subjecting nurseries to business rates at the end of this month will be a huge source of relief today. This will help nurseries in the short term who are struggling with low attendance levels and rising operating costs, but the relief really should be made permanent for these businesses. Business rates remain an unfair tax on space which nurseries give children to grow, learn and develop.

“But with 58% of nurseries telling us they may not make it to the end of the term, they clearly need urgent support now to plug the gap created by low attendance and higher costs. There were no specific measures for childcare settings to support them with these. Without more financial support we are likely to see more closures and ultimately, we risk there being insufficient childcare places for all children.

“The Furlough Scheme has been a vital lifeline to childcare providers and also to parents but as demand increases the need for this in nurseries will reduce. We have previously seen a Job Retention Bonus in place to support employers at the end of the furlough scheme. Over 70% of the early years workforce have been furloughed at some point. They are skilled workers who are vital to children’s development and employers should be supported to retain them.

“As people look at their workforce needs and consider the future, support for apprenticeships and trainee positions will help employers cover some of the costs and extra work involved in taking on these roles and developing future early years professionals and leaders.

“Support for investment is welcome but many early years providers are focused on survival and sustainability for the coming months. The Chancellor has promised to do whatever it takes to protect businesses and jobs. Early years remains critical to children’s life chances as well as the wider economy for working families. ‘Whatever it takes’ would have included overturning the spring term funding decision which has hit settings’ funding as well as offering targeted financial support to help settings weather this storm.”

Chancellor Rishi Sunak announced:

Business rates relief for English nurseries extended until end June; for the rest of the year a two thirds discount
CJRS extended until end of September - businesses pay 10% in July and 20% August and September
Apprentices - doubling incentive payments to businesses to £3k for all new apprentices of any age 
National Living and Minimum Wages increasing in April (as previously announced)
Loans – new recovery loan scheme from £25k to £10m available until the end of the year – Government guarantee to lenders 80%
Help to Grow – SMEs get management training – business schools will offer new executive mentoring programme, Government paying 90% of the cost
Help to Grow digital –small businesses can get free expert training and 50% discount on productivity enhancing software worth up to £5k each
Barnet formula – increased funding by 1.2bn to Scotland and £740m to Wales

Unemployment is forecast to reach 6.5% and the economic forecast is for the economy to start growing during 2021/22. However the forecast is that in five years’ time, the economy will be 3% smaller than it would have been as a result of Covid-19.

Read the full package of measures here