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Children: Day Care

Department for Education written question – answered on 18th October 2018.

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Photo of Tracy Brabin Tracy Brabin Shadow Minister (Education)

To ask the Secretary of State for Education, what assessment he has made of the potential merits of (a) removing and (b) freezing business rates on early years and childcare settings.

Photo of Nadhim Zahawi Nadhim Zahawi The Parliamentary Under-Secretary of State for Education

Not all early years and childcare settings in England will pay business rates. The government has introduced a range of business rate reforms and measures, which will be worth more than £10 billion by 2023. This includes:

  • raising the rateable value threshold for 100% relief from £6,000 to £12,000, which means that about 655,000 small businesses pay no business rates at all.
  • A package of support worth £435 million over five years to support the businesses facing the steepest increases following the 2017 revaluation.

We are also increasing the frequency of property revaluations from every five to every three years following the next revaluation, to ensure that bills more accurately reflect property values.

Further, we provided powers under the Localism Act 2011 to enable local authorities to offer business rate discounts. In 2015, officials wrote to all councils to encourage them to use those powers to support access to local high-quality childcare provision. It is a matter for local authorities to exercise those powers as they see fit. We do not collect information on how local authorities have used these powers in relation to early years and childcare settings.

There has been no specific assessment made of the impacts of removing or freezing business rates on the early years market, however we have commissioned independent research to provide us with robust, up-to-date evidence on the costs of delivering childcare, including operating costs such as business rates.

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