Spring Budget 2023: What is the new childcare scheme?

He explained that mothers with young children struggle to go back to work due to childcare costs.

Hunt warned: “We have one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

“For many women, a career break becomes a career end. Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than one million more women who want to work, in the labour force. And we can.”

Jeremy Hunt announced his Spring Budget today (Image: Stefan Rousseau/PA Wire)

What is the new childcare scheme?

On childminders, Mr Hunt said he wanted to address the 9% decline in one year in England, adding: “I have … decided to address this by piloting incentive payments of £600 for childminders who sign up to the profession, rising to £1,200 for those who join through an agency.”

The Chancellor said the Government will increase funding paid to nurseries that provide free childcare with £204 million to be invested from this September, rising to £288 million next year.

He said: “This is an average of a 30% increase in the two-year-old rate this year, just as the sector has requested.”

Mr Hunt added: “We will change minimum staff-to-child ratios from 1:4 to 1:5 for two-year-olds in England as happens in Scotland, although the new ratios will remain optional with no obligation on either childminders or parents to adopt them.”

Who will be eligible for free childcare?

The Chancellor announced 30 hours of free childcare for all under 5s starting when maternity care ends, where eligible.

He told the Commons: “I today announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three- and four-year-olds, but for every single child over the age of nine months.

“The 30 hours offer will now start from the moment maternity or paternity leave ends. It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and reduces their childcare costs by nearly 60%. Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.

“Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.

“From September 2024, that 15 hours will be extended to all children from nine months up, meaning a total of nearly one million parents will be eligible. And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.”

Some parents will be eligible for the new childcare scheme (Image: PA Wire/PA Images)

What is the current eligibility for 30 hours of free childcare?

Currently, parents with children who are three or four years old can "claim 570 hours of free childcare a year, equating to up to 15 hours a week", iNews reports.

An extra 15 hours of free childcare can be provided if parents are eligible, making it 30 hours, iNews explains.

A parent can usually be given 30 hours if they (and their partner if they have one) are employed, on sick leave or annual leave or on shared parental, maternity, paternity or adoption leave, iNews reports.

That’s not all though as you could also be eligible “if your partner is working, and you receive incapacity benefit, severe disablement allowance, carer’s allowance, limited capability for work benefit or contribution-based employment and support allowance”, according to iNews.

INews adds that "over the next three months you and your partner (if you have one) must each expect to earn at least" the following amounts, depending on your age:

• Aged 23 or over - £1,976
• Aged 21 or 22 - £1,909 
• Aged 18 to 20 - £1,420
• Aged under 18 or if you're an apprentice - £1,000 

It's important to note that "this is at least the national minimum wage or living wage for 16 hours a week on average" and a National Insurance number is also needed to be eligible for the free childcare plus one of the following, according to iNews:

• British or Irish citizenship
• Settled or pre-settled status (or if you've applied but haven't received a decision yet)
• Permission to access public funds (your UK residence card will explain if you're unable to do this)

Your partner (if you have one) must also have a National Insurance number to be eligible for free childcare and iNews says that "if your child does not usually live with you", you won't be eligible.

Wrap-around care either side of school day to be offered by September 2026

The Government aims for all schools in England to offer wrap-around care on either side of the school day for children by September 2026, the Chancellor said.

“One-third of primary schools do not offer childcare at both ends of the school day, even though for many people a job requires availability throughout the working day,” Jeremy Hunt said.

He added: “To address this, we will fund schools and local authorities to increase supply of wraparound care so all school-age parents can drop their children off between 8am and 6pm.

“Our ambition is that all schools will start to offer a wraparound offer, either on their own or in partnership with other schools, by September 2026.”