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Fears about business rates for day nurseries raised by National Day Nurseries Association (NDNA) have prompted minister for childcare, Sam Gyimah, to ask local councils in England to offer a discount to private day nurseries.
The survey revealed the lack of Government funded free nursery places and the effects on parents paying fees, as well as further problems with local authorities not providing enough choice for funded nursery places in Scotland and Wales.
The NDNA’s survey was launched at the House of Commons where Mr Gyimah revealed plans to reduce childcare costs for parents and childcare providers.
Mr Gyimah said: “Nurseries need large buildings, even though in relative terms the value of your business may be low. I’ve been considering what I can do to help.”
Mr Gyimah talked about how he had asked the Department for Communities and Local Government (DCLG) to contact English councils and encourage them to give nurseries a discount on business rates and revealed that the Government would pay 50 per cent of the costs incurred by local councils as a result.
“Today, at my request, DCLG will be writing to all councils reminding them of the importance of prompt payment to you and your businesses. I’ll also be urging them to work closely with you - to understand your business models and how they could provide further support.” “The letter will also remind your local authorities how valuable it is to apply business rates relief to nurseries to help you out and encourage our growing and thriving sector. For councils that give this discount, central Government will meet 50 per cent of the costs involved.”
The NDNA revealed that currently, only voluntary sector nurseries are eligible for business rate relief whereas private day nurseries providing the majority of nursery places in England have to pay business rates in full unless they are valued at less than £12,000. The NDNA disclosed that the average cost of business rates is estimated at £15,841 and the average rateable value of nurseries is £30,000.
The NDNA’s chief executive, Purnima Tanuku welcomed Mr Gyimah’s recommendations and said: “Business rates push up fees. Our solution is for Government to recognise the community benefit all nurseries provide by giving the childcare sector 100 per cent relief on business rates. Today’s move is a real step in the right direction and looking to the future, we would like the Government to apply this rate relief for nurseries nationwide.”
Alison McGover, shadow minister for childcare, attended the NDNA’s reception at the House of Commons and said: “This is an excellent and important report that we will pore over in the weeks and months to come. Business rates is something that we in the Labour Party have been talking about for some time. We want to see a fundamental review.”