Jeremy Hunt will reportedly announce a £4bn expansion of free childcare for one and two year-olds in England in Wednesday’s Budget.
The plan would extend the 30 hours-a-week entitlement to parents of one and two year-olds in England that is currently available only for three and four year-olds, the Guardian reported.
Downing Street did not deny that the major shake-up to childcare could be the Chancellor’s so-called “rabbit in the hat” surprise in the Budget.
It will come amid wider reforms of the sector including subsidies to childcare providers to boost capacity to deliver free hours, a changing of the staff-to-child ratios so one worker can look after five, rather than four children.
Mr Hunt is also expected to ensure childcare payments to Universal Credit (UC) claimants will be paid in advance rather than arrears, as first reported by i.
The Guardian reported that the Chancellor reversed his initial opposition to Department for Education (DfE) childcare proposals after forecasts came back showing it would help boost growth.
The issue of childcare is emerging as a major battleground for the next election, with Labour repeatedly suggesting it was preparing to make a big offer to parents.
Mr Hunt is likely to make any childcare announcement central to his Budget pitch to tackle economic inactivity and get more people back into work.
On Sunday, the Chancellor said: “We need to break down the barriers that stop people here in the UK from working – whether that’s parents who have obstacles because of childcare costs, whether it’s older people who feel they need to retire earlier … whether it’s long-term sick who find there are barriers to working.”
He added that “this is a Budget in which I will be systematically going through all the areas where there are barriers that stop people working who want to”.
Mr Hunt also claimed changes on childcare would not help parents who are not on UC.
“We would like to help everyone. It’s expensive to do it. You can’t always do everything at once,” he said.