Huge boost for childcare sector in Wales as small business rates relief made permanent

Registered childcare premises will no longer have to pay business rates, saving millions of pounds every year.

Estimated to save the sector £3.4 million annually, the now permanent non-domestic rates relief for childcare premises will support childcare providers to invest in staff, create new jobs and reduce fee increases for parents.

Since 2019, premises like day nurseries have not paid business rates in Wales thanks to the small business rates relief scheme - helping many tackle rising costs and continue to operate.

Minister for Children and Social Care, Dawn Bowden said:

Childcare settings provide an essential service in Wales, offering nurturing environments for our children and helping parents to access employment, education or training.

But we know that the sector is under significant pressure and in need of ongoing support to meet their costs.

Making business rates relief for registered childcare premises permanent will be a huge boost to the sector, providing stability and helping providers reinvest savings back into their business to continue delivering high quality, and affordable childcare.

It is the right thing to do for our children, parents and providers now and for the future.

Cabinet Secretary for Finance and Welsh Language, Mark Drakeford said:

Today’s announcement is part of our £100m annual investment and longstanding commitment to sustaining and growing high-quality childcare.

We want the childcare sector to be financially sustainable and this scheme will help reduce the risk of premises closing, meaning that registered childcare premises can continue their vital services and benefit families across Wales.

Chief Executive of the National Day Nurseries Association (NDNA), Purnima Tanuku OBE said:

Following lobbying from NDNA Cymru and other Cwlwm partners, we are delighted that the Welsh Government will continue with this rates relief for nurseries on a permanent basis.

Childcare providers across Wales have faced rising delivery costs making it more difficult to remain sustainable while delivering funded early years places.

Permanently removing the burden of business rates is a positive step to helping nurseries and providing certainty. In making this decision, the Welsh Government is recognising the value of supporting the early years sector.

Managing Director for Daisy Day Nursery, Abeer Bafaqih said:

It is encouraging to see that the Welsh Government is recognising and considering the positions that childcare providers are in.

The decision to extend the relief of business rates is a significant step. It's a financial burden that we're relieved to learn the already strained sector won't need to carry.

At a time when we're seeing families stretching their income, we are grateful that the relief means we will be able to continue to offer a reasonable fee structure to them.

We look forward to the Welsh Government's continuing support and advocacy for the Early Years sector and the families using these services.