Question to the HM Treasury:

To ask His Majesty's Government what estimate they have made of the cost to early years education providers of the changes to employer National Insurance contributions announced in the Autumn Budget 2024 (HC 295).

The Government has taken a number of difficult but necessary decisions on tax, welfare, and spending to repair the public finances, rebuild public services, and restore economic stability after the situation we inherited from the previous government.

The Government has protected the smallest businesses from the impact of the increase to employers’ National Insurance by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no employer NICs at all next year.

Early years providers play a crucial role in driving economic growth and that is why we have committed to delivering the expansion of government-funded childcare and invested £370m at the Spending Review in opening 3,000 new school-based nurseries in this parliament.

At the Budget in October 2024, the Chancellor announced that total funding will rise to over £8 billion in 2025-26 on early years entitlements, followed by an announcement at the Spending review of an additional £1.6bn per year by 2028-29. On top of this, the Department for Education confirmed an additional £75 million of funding in 2025-26 to support the childcare sector to deliver the final phase of expanded childcare entitlements from September 2025, alongside a further £25 million to support childcare for disadvantaged children through the early years pupil premium.