Energy support for firms will be scaled back by the government under a new scheme that will come into effect from April

Current levels of economic support have been deemed ‘too expensive’ under the current climate. Under the new scheme, businesses will be about to get a discount on wholesale prices instead of costs being capped. This scheme will run until the end of March 2024.

Commenting, Neil Leitch, chief executive of the Early Years Alliance, said:

“It is incredibly concerning to learn that energy support for businesses is set to be significantly scaled back.

“As our recent research has shown, many early years providers are already being forced to pass the rising cost of energy on to parents or in the worst cases, close their doors completely.

“While the continuation of some energy support is better than nothing, the harsh reality is that the level of support announced today is unlikely to do much, if anything, to improve the current situation, especially given that the rising cost of energy is only one of a myriad of challenges affecting early years settings.

“With providers also facing severe staffing shortages, record increases in the national minimum and level wage and wider inflationary pressures, it is clear that urgent action is needed to prevent the collapse of our vital sector.

“As such, it is absolutely vital that the government commits to the investment and financial support needed to safeguard the future of the early years. Ministers have dragged their feet for long enough.”

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA) said:

“The fact that the government plans to spend £5.5 billion on this scheme for the next twelve months compared with £18 billion over the past six months tells you that individual businesses will see the amount of support drop quite significantly. For early years settings, who are already closing at an alarming rate, this could be disastrous.

“Early years settings like nurseries provide a warm and nurturing environment as well as hot meals for our youngest children. With government funding increases well below inflation and rising costs they are facing serious, real-terms cuts. These providers are being put between a rock and a hard place with the only options being raising fees to parents or closing their doors.

“If there is no more than the basic level of help for nurseries through this scheme then the government must look to other ways to protect our vital early years sector. Additional funding and more support through business rates relief have to be explored. If this isn’t addressed more settings will close and parents and children will pay the price.”