UK Government – Spring Budget 2023 – Help With the Cost of Living

Help With the Cost of Living

In the Autumn Statement 2022, the UK government announced benefits uprating details and cost of living support for 2023/2024.

The UK government is now taking further steps in the Spring Budget 2023 including additional energy support, childcare support, and extending the cut to fuel duty.

The Energy Price Guarantee (EPG)

The UK government has already taken action to support households through the Energy Price Guarantee (EPG), which places a limit on the price households pay per unit of gas and electricity.

In the face of retail energy costs that are expected to remain historically high through the spring, the UK government is maintaining the EPG at its current £2,500 per year level for an additional 3 months (April to June 2023).

The planned increase in the EPG to a level of £3,000 per year will therefore be implemented on 1 July 2023, rather than 1 April 2023 as previously announced.

Energy Bills Discount Scheme

The Energy Bills Discount Scheme will provide all eligible businesses and other non-domestic energy users across the UK with a discount on high energy bills until 31 March 2024, following the end of the current Energy Bill Relief Scheme. It will also provide businesses in sectors with particularly high levels of energy use and trade intensity with a higher level of support.

Energy Bills Discount Scheme – GOV.UK (www.gov.uk)

Childcare

Working parents in England will be able to access 30 hours of free childcare per week, for 38 weeks of the year, from when their child is 9 months old to when they start school.

This will be rolled out in stages:

• From April 2024, all working parents of 2-year-olds can access 15 hours per week
• From September 2024, all working parents of children aged 9 months up to 3 years old can access 15 hours per week
• From September 2025 all working parents of children aged 9 months up to 3 years old can access 30 hours free childcare per week

Where parents need childcare for more than 38 weeks a year, they are able to spread their free hours entitlement over a higher number of weeks.

The UK government will also substantially uplift the hourly rate paid to providers to deliver existing free hours offers to parents. The UK government will provide £204m of additional funding this year, increasing to £288m by 2024/2025. This funding is additional to the £4.1 billion that the UK government will provide by 2027/2028 to facilitate the expansion of the new free hours.

The UK government will also change the staff-to-child ratios for 2-year-olds, moving from 1:4 to 1:5 to align with Scotland and comparable countries, and will consult on further measures to give providers flexibility. The new ratios will give providers more flexibility, without compromising children’s safety or quality of provision. They will be optional, with no obligation on providers to adopt them.

The UK government will also provide start-up grants for new childminders, including for those who choose to register with a childminder agency.  Childminders who register with Ofsted will receive a start-up grant of £600, whereas those who register with a childminder agency will receive £1,200.

Wraparound Childcare:

The UK government will give local authorities in England £289 million over two academic years, starting in September 2024, to set up wraparound childcare provision in schools.

Universal Credit Childcare Paid up Front:

The UK Government will pay parents on Universal Credit childcare support up-front when they are moving into work or increasing their hours, rather than in arrears meaning low-income families will find it easier to afford and it will help remove a barrier that many face when thinking about going back to work.

Increasing Universal Credit Childcare Costs:

The UK Government will increase the Universal Credit childcare cap to £951 for one child (up from £646) and £1,630 for two children (up from £1,108).

Fuel Duty Rates

Petrol and diesel prices continue to be volatile given the ongoing conflict in Ukraine and inflation remains high.

The UK government will continue to support households and businesses by maintaining the rates of fuel duty at the current levels for an additional 12 months by extending the temporary 5p fuel duty cut and cancelling the planned fuel duty increase in line with inflation for 2023/2024.

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

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