The SNP has condemned the UK Government’s decision to hike national insurance contributions in its recent budget as they say it leaves thousands of childcare providers in Scotland at risk. 

The SNP has warned that the UK Labour government’s decision to increase employers’ National Insurance contributions poses a “grave threat to Scotland’s childcare providers”. 

Their call comes after the Early Years Alliance (EYA) warned that parents will faces higher costs as national insurance costs and wage sector rises will have a negative impact on the childcare sector. 

In her recent budget announced at the end of October, the UK Chancellor announced employers’ National Insurance (NI) Contributions would rise from 13.8% to 15% - which is expected to raise more than £25 billion for the Treasury. 

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A poll from the EYA – of 1,007 senior staff in nurseries, preschools and childminders in England – found that 95% said their setting was likely to raise fees for non-government funded hours if cost pressures from NI and minimum wage rises were not adequately funded or addressed by the Government.

Two in five (40%) said permanent closure of the early years setting was likely, the poll found.

In Scotland, three to five year olds can get up to 1,140 hours - or 30 hours per week - of term time funded early learning and childcare a year. 

However, after a child turns three there is no early or childcare funding available for many young families in Scotland.

Jackie Dunbar, SNP MSP and Deputy Convener of the Children and Young People Committee,  said: “The Labour Party breaking promises is not new, but this betrayal has the potential to be catastrophic for families across Scotland and the childcare sector.

“Scotland’s 3,562 providers – be they local authority or private settings – play a vital part in the formative years of a child’s life, enabling them to learn and grow while also supporting parents in work.

 “But this tax hike could devastate them.

“These providers are crucial to the delivery of the SNP Government’s childcare offer – which is the most generous in the UK – and as such should be supported in grappling with the cost of Labour’s decisions.

“You cannot tax your way to growth and prosperity, and you certainly can’t do it by harming Scottish families and childcare providers. Labour must rethink this decision before its consequences are felt by Scottish families.”

The UK Government has said they have had to take "tough decisions" to “fix the foundations” for childcare provisions for the future. 

A UK Government spokesperson said: “With public services crumbling across the UK including Scotland, and an inherited £22 billion fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability.

“Childcare and funding of local authorities are responsibilities devolved to the Scottish Government and it will receive additional funding on top of its record £47.7 billion settlement to support with costs associated with changes to Employer National Insurance.”