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Politics

More than a quarter of childcare providers fear they won’t survive the year

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MORE THAN a quarter of childcare providers say they will not survive the year due to funding rates failing to keep up with costs, a committee warned.

Jenny Rathbone, who chairs the Senedd’s equality committee, highlighted an Early Years Wales survey which raised the sector’s concerns about financial sustainability.

The Cardiff Central MS said while 72% of providers were confident they would survive for one year, that means 28% feared for their immediate future under the current model.

Ms Rathbone warned of a “falling-off-a-cliff” scenario with 80% of providers saying they did not think they would survive two years and only 9% confident of surviving the next five.

Calling for a rapid review, Ms Rathbone warned: “Any increase in funding would only come in the next financial year. So, where does that leave these people?”

Buffy Williams, a fellow Labour backbencher, said almost all providers want the hourly rate of childcare offer funding to be reviewed annually or linked to inflation.

She raised evidence to the committee that the current £5 rate – which was initially set in April 2022 – is unsustainable and risks the viability of a large number of childcare providers.

Jayne Bryant, who is new in post as early years minister, said a three-year cycle aligns with the budget-setting process but she would be open to reviewing the vital rate more regularly.

Acknowledging the fragility of the childcare sector, she said: “I do recognise that for some providers this really does mean that they’re operating very close to the financial wire.”

Ms Bryant confirmed any rate change would not come into effect until April 2025, stressing that budgets are tight and decisions must be based on robust evidence.

Clare Severn, the Welsh Government’s head of childcare and policy, warned that childcare settings in Wales face “really, really tough times”.

She said: “The national minimum wage has really impacted on childcare settings.

“The increase in the actual wage as well as the change to the age at which people are entitled to the national minimum wage has really fallen hard on the childcare sector.”

Jane Dodds, the Lib Dems’ leader in Wales, who was a social worker for 27 years, raised concerns about inadequate provision across Wales for disabled children.

Sharing her concerns, Ms Bryant pointed to the additional support grant, which aims to ensure that all children have equal access to the Welsh Government’s childcare offer.

Pressed for a timeline on proposals for professional registration of the workforce, Ms Severn stressed the need to tread carefully, suggesting the reforms are at least two to three years off.

Plaid Cymru’s Sioned Williams highlighted evidence from the Bevan Foundation and Oxfam Cymru that most parents believe childcare is completely unaffordable.

Ms Bryant told the committee a universal childcare system remains the ambition, with a wider vision for a fully integrated early childhood play, learning and care system.

Quizzed about the expansion of the childcare element of the Flying Start programme, the witnesses said five councils are lagging due to recruitment and retention challenges.

Responding to the Bevan Foundation’s calls for a more cohesive childcare offer, Ms Bryant agreed it is important to make it as easy as possible for parents to understand entitlements.

Carolyn Thomas, who represents North Wales, echoed the Wales TUC’s calls for a childcare forum to tackle low pay and the undervaluing of a predominantly female workforce.

The Labour MS highlighted suggestions that standards and benchmarks relating to the workforce could be used as a condition of funding in future.

Ms Bryant suggested Wales could follow Scotland in attaching requirements in relation to pay and staff development, particularly a commitment to the real living wage.

Giving evidence as part of the committee’s follow-up inquiry after a 2022 report on childcare, she said she will shortly be launching a review and refresh of the ten-year workforce plan.

Pressed for her priorities, the early years minister listed the first 1,000 days in a child’s life, workforce challenges and equal access to childcare for disabled children.

News

Hundreds of Pembrokeshire Council Tax defaulters in court next week

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HAVERFORDWEST Magistrates’ Court will hear cases against hundreds of defendants next week as Pembrokeshire County Council seeks liability orders for unpaid council tax and non-domestic rates.

The session, scheduled for Monday (Mar 17) at 10:00am, will see a block of cases between 12:00pm and 1:00pm dedicated to council tax disputes. The council is applying for liability orders under regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992.

A total of 341 defendants are listed for non-payment of council tax, while a further 18 cases relate to unpaid non-domestic rates under Regulation 12 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989.

Liability orders allow the council to take further enforcement action, which may include deductions from wages or benefits, bailiff action, or bankruptcy proceedings.

The Herald will provide further updates following the hearing.

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News

Reimburse charities for NI rise, say Welsh Conservatives

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CHARITIES not-for-profits, and voluntary organisations in Wales face mounting financial strain due to an increase in employer National Insurance (NI) contributions, prompting calls for government intervention.

The UK Labour Government’s decision to raise employer NI contributions has drawn sharp criticism from the Welsh Conservatives, who warn that the move will place an undue burden on charities and voluntary groups. While public sector bodies such as the NHS and local councils will receive compensation for the additional costs, charities providing essential services under local authority contracts will not be reimbursed.

A survey by the Welsh Council for Voluntary Action (WCVA) found that 84% of voluntary organisations are concerned about how they will manage the NI increase.

Senedd debate on reimbursement

Next week, the Welsh Conservatives will bring forward a Senedd debate urging the Welsh Labour Government to press Westminster for financial support for Welsh charities, not-for-profits, and voluntary organisations. The motion argues these groups should be classified under the Office for National Statistics’ (ONS) definition of public sector employees to qualify for reimbursement.

Welsh Conservative Shadow Secretary for Economy, Energy, and Welsh Language, Samuel Kurtz MS, said:

“Welsh charities, not-for-profits, and voluntary organisations play a vital role in delivering public services that the most vulnerable in society depend upon.

“Labour’s decision to increase employer National Insurance contributions will have a detrimental impact on the future and viability of these organisations.

“The Welsh Conservatives are clear: Labour must ensure that Welsh charities, not-for-profits, and voluntary organisations are reimbursed for this rise in employer National Insurance contributions.”

Sector voices concern

The WCVA has also warned that the NI increase could put crucial community services at risk.

A WCVA spokesperson said: “WCVA is deeply concerned about the impact of increased Employers’ National Insurance contributions on voluntary sector organisations across Wales. Many of these organisations already face significant financial pressures, and this increase threatens to put additional strain on their resources and potentially jeopardise vital services delivered to communities.

“We have strongly urged both the UK and Welsh Governments to recognise the invaluable role the voluntary sector plays, especially in partnership with public services. We believe it is critical for voluntary organisations delivering public services to be treated equitably and included in any financial support measures, ensuring they are not disproportionately disadvantaged by these policy changes.

“WCVA welcomes the debate in the Senedd and hopes it will lead to productive discussions and practical solutions to protect the voluntary sector’s essential contribution to Welsh society.”

Motion to be debated

The Senedd motion, set for debate next week, states:

  • Notes the UK Government’s increase to employer National Insurance contributions, coming into effect for the 2025-26 tax year.
  • Recognises the detrimental impact the increase will have on Welsh charities, not-for-profits, and voluntary organisations.
  • Calls on the Welsh Government to make urgent representations to the UK Government to ensure that these organisations delivering public services are included in the ONS-defined public sector category and are reimbursed for the rise in employer National Insurance contributions.

The debate will determine whether Welsh Labour will push for financial support to shield the voluntary sector from these additional costs.

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News

Local Authority is ‘hoarding cash’ as Council Tax rises by 9.35%, says MS

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DEMANDS FOR REFORM AS COUNCIL’S £83 MILLION RESERVES REVEALED

PEMBROKESHIRE residents are bracing for a 9.35% council tax rise, despite local authorities across Wales holding more than £2 billion in reserves. The increase, among the highest in Wales, comes as families struggle with soaring living costs and a series of consecutive tax hikes.

Paul Davies MS: Welsh Government should do more to help keep Council Tax as low as possible (Image: File)

Local Senedd Member Paul Davies has called for urgent reform, criticising the Welsh Government’s Local Government Funding Formula and urging councils to use their reserves to ease the burden on taxpayers.

‘UNFAIR AND UNSUSTAINABLE’

Mr Davies said: “Under the Welsh Government, the Local Government Funding Formula remains broken.

“It cannot be right that people in Pembrokeshire face such a huge increase in their council tax while councils across Wales are sitting on over £2 billion in usable reserves.

“The Welsh Government must do more to keep council tax as low as possible by encouraging the use of reserves, improving efficiency within councils, and promoting the sharing of resources across council boundaries.”

CALLS FOR CHANGE

The Welsh Conservatives have consistently opposed large council tax increases, calling for an independent review of the Local Government Funding Formula. They argue that councils should:

  • Use reserves to reduce tax rises.
  • Improve efficiency by cutting unnecessary spending.
  • Increase cooperation between councils to share services and lower costs.

RISING RESERVES, RISING BILLS

For years, Pembrokeshire had the lowest council tax in Wales, but after a 12.5% rise in 2024-25, it has surged significantly. Despite this, Pembrokeshire County Council holds £82.6 million in usable reserves, equivalent to 28.4% of its annual service expenditure.

In 2016-17, the council held just £47 million in reserves, rising to £83 million in 2021-22. Critics argue that this surplus should be used to relieve financial pressures rather than imposing further tax hikes.

With councils under fire for hoarding cash while demanding more from residents, pressure is mounting on the Welsh Government to overhaul funding and prevent further unaffordable rises.

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