Business rates scrapped for children's day nurseries in Wales

Some private nurseries are struggling to stay afloat, campaigners say

Business rates will be scrapped for day nurseries in Wales after claims the industry was struggling to survive.

Campaigners had called for the exemption to help nurseries deliver the Welsh Government pledge of 30 hours of free childcare a week.

One nursery owner said the tax cut, worth £30,000 a year to his business, would help tackle a shortage in childcare providers.

The cut will be brought in from April and last for three years.

Finance Secretary Mark Drakeford said the tax cut will help nurseries become more established. It will be reviewed in 2022.

The childcare scheme - aimed at working parents with three to four years olds - is currently being piloted in eight local authorities and in parts of six others.

It is planned to be fully rolled out by 2020.

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Campaigners say that nurseries, with large properties and space for children to play, often face high business rates.

A cut to business rates for childcare providers came into effect in April but National Day Nurseries Association (NDNA) estimated four in 10 private nurseries were still subject to the tax.

Neil Blockley, who co-owns Little Inspirations which has six nurseries across South Wales, said childcare providers have "small profit margins" and face "rising costs from pensions and the living wage".

Nursery owner Neil Blockley welcomed the reduction in overheads

"We know, particularly in Rhondda Cynon Taf and other areas of Wales, there are some real hot spots of shortage of childcare providers in certain areas," he said.

"This significant reduction in our overheads will make expansion opportunities happen faster."

Scotland scrapped business rates for nurseries for three years in April last year.

Children's Minister Huw Irranca-Davies, said: "The childcare sector has told us that a total exemption from non-domestic rates would make a real difference to their business confidence.

Campaigners say some nurseries face higher business rates because of their large size

"We've listened and taken action."

Purnima Tanuku, chief executive of NDNA Cymru, said: "This is fantastic news for all childcare businesses in Wales, especially the private sector nurseries who are struggling to remain sustainable.

"We have been working closely with the Welsh Government and put forward the arguments about why nurseries should be made a special case. Private and voluntary nurseries, who can give working parents the quality and flexibility they need and want, have been delivering funded childcare places at a loss for years.

"As the new Childcare Offer for Wales is rolled out across the country, this approach from the Welsh Government gives a clear message to the sector that they are valued and their involvement is crucial for this ambitious scheme to be successful."