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Parents who are entitled to hours of free childcare should not have to pay mandatory extra charges to secure their nursery place, the government has said.

Updated guidance from the Department for Education states that while nurseries are entitled to ask parents to pay for extras – including meals, snacks, nappies or sun cream – these charges must be voluntary rather than mandatory.

The guidance, which comes amid concerns that parents have faced high additional charges on top of the funded hours, also states that local councils should intervene if a childcare provider seeks to make additional charges a condition for parents accessing their hours.

Since September last year, parents and carers with children aged nine months and older have been entitled to 15 hours of government-funded childcare a week, rising to 30 hours for three to four year-olds.

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From this September, the 30 hours of care will be made available to all families – a rollout that was first introduced under the previous Conservative government.

However, there have been concerns that in order to subsidise shortfalls in funding, nurseries have charged parents extra for essentials that would normally have been included in fees.

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Under the new guidance, nurseries will be now obliged to clearly set out any additional costs parents will have to pay, including on their websites.

It says invoices should be itemised so parents can see a breakdown of the free entitlement hours, additional private paid hours and all the additional charges.

‘Fundamental financial challenges facing the sector’

Representatives of childcare providers welcomed the announcement but pointed out the financial stress that many nurseries were under.

Neil Leitch, chief executive of the Early Years Alliance, said: “While we fully agree that families should be able to access early entitlement hours without incurring additional costs, in reality, years of underfunding have made it impossible for the vast majority of settings to keep their doors open without relying on some form of additional fees or charges.

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Free childcare in England

“As such, while it is absolutely right that providers should be transparent with parents on any optional additional fees, today’s guidance does absolutely nothing to address – or even acknowledge – the fundamental financial challenges facing the sector.”

He added: “Given that from September, government will control the price of around 80% of early years provision, it has never been more important for that funding to genuinely reflect the true cost of delivering places.

“And yet we know in many areas, this year’s rate increases won’t come close to mitigating the impact April’s National Insurance and wage rises, meaning that costs for both providers and families are likely to spiral.”

In last year’s budget, Chancellor Rachel Reeves announced that the amount businesses will pay on their employees’ national insurance contributions will increase from 13.8% to 15% from April this year.

She also lowered the current £9,100 threshold employers start paying national insurance on employees’ earnings to £5,000, in what she called a “difficult choice” to make.

Last month a survey from the National Day Nurseries Association (NDNA) found that cost increases from April will force nurseries to raise fees by an average of 10%.

Analysis by Anjum Peerbacos, education reporter

This could be welcome news for working parents as they approach the end of another half term break during which they will have incurred childcare costs.

But this money would not affect school age children.

It is dedicated to very young children, aged two or below and is targeting parents, predominantly mothers, that want to return to work.

Previously after doing the sums and factoring in childcare costs, many mums would have felt that it wasn’t worth it.

And so, if these funds are easily accessible on a local level it could make a real difference to those wanting to get back to work.

The survey, covering nurseries in England, revealed that staffing costs will increase by an average of 15%, with respondents saying that more than half of the increase was due to the national insurance decision in the budget.

Purnima Tanuku CBE, chief executive of the NDNA, said “taking away the flexibility for providers around charges could seriously threaten sustainability”.

“The funding government pays to providers has never been about paying for meals, snacks or consumables, it is to provide early education and care,” she said.

“Childcare places have historically been underfunded with the gap widening year on year.

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Parents ‘frustrated’ over rising childcare demand

“From April, the operating costs for the average nursery will go up by around £47,000 once statutory minimum wages and changes to national insurance contributions are implemented. NIC changes have not been factored into the latest funding rates, further widening the underfunding gap.”

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The Department for Education said its offer to parents meant they could save up to £7,500 on average when using the full 30 hours a week of government-funded childcare support, compared to if they were paying for it themselves.

In December, the government also announced that a £75m expansion grant would be distributed to nurseries and childminders to help increase places ahead of the full rollout of funded childcare. 

Local authority allocations for the expansion grant will be confirmed before the end of February. Some of the largest areas could be provided with funding of up to £2.1m.

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Central banks testing smart contract toolkit under BIS Project Pine

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Central banks testing smart contract toolkit under BIS Project Pine

Central banks testing smart contract toolkit under BIS Project Pine

Central banks are experimenting with smart contracts to implement monetary policy in tokenized environments, signaling a growing interest in integrating blockchain technology into traditional finance (TradFi).

According to a joint research study by the Federal Reserve Bank of New York’s Innovation Center and the Bank for International Settlements (BIS) Innovation Hub Swiss Centre, smart contracts could offer central banks flexible, rapid-response tools in a tokenized financial system.

The study, dubbed Project Pine, tested a prototype “generic customizable monetary policy tokenized toolkit” for further research by central banks, according to a BIS report published May 15.

“The smart contract toolkit was fast and flexible,” the BIS wrote. “In hypothetical scenarios, the central bank was able to add and change tools instantly.”

The report emphasized that if tokenization becomes widely adopted for money and securities, smart contracts could play a central role in how monetary policy is executed.

Central banks testing smart contract toolkit under BIS Project Pine
Project Pine system overview. Source: BIS

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This marks a “first step” in highlighting the potential benefits of tokenization for central banks, according to the BIS.

The framework “speed and consistency” was “validated” within a 10-minute hypothetical scenario where central banks quickly changed collateral criteria and exchanged liquid collateral for illiquid amid falling collateral values.

The smart-contract framework also allowed central banks to deploy a new facility offering reserves and changing the interest rates on the reserves in an “immediate” implementation.

Central banks testing smart contract toolkit under BIS Project Pine
Project Pine, smart contract operations. Source: BIS

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Smart contracts, tokenization may help central banks

Smart contracts and tokenization technology may help central banks’ rapid response to “extraordinary events,” the BIS report said:

“This speed, coupled with the ability to adjust any of the parameters at any time, gives central banks flexibility in responding to unforeseen events and fast-moving crises.”

While promising, the report also acknowledged that central banks will likely face infrastructure challenges, as most existing systems are not designed for these advanced use cases.

Central banks testing smart contract toolkit under BIS Project Pine
Smart contract testing scenario. Source: BIS

Project Pine employed Ethereum’s ERC-20 token standard combined with another standard for “access control.”

Financial institutions have increasingly embraced tokenization in recent years.

At the Consensus 2025 conference, Joseph Spiro, product director at DTCC Digital Assets, called stablecoins the “perfect” financial instrument for real-time collateral management for financial transactions such as loans or derivatives.

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MPs on farming committee call on Rachel Reeves to delay family farm tax

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MPs on farming committee call on Rachel Reeves to delay family farm tax

The UK’s food security and the future of farming lies in Rachel Reeves’ hands, a leading MP has said as a committee called on the government to delay farm inheritance tax changes.

The environment, food and rural affairs (EFRA) committee has released a report calling on the government to delay the reforms for a year until April 2027.

Chancellor Rachel Reeves announced in the October budget farmers would no longer be allowed to claim inheritance tax relief for farms worth more than £1m from April 2026.

The move prompted multiple protests in Westminster by farmers who said it will threaten the future of thousands of multi-generational family farms.

The EFRA committee, made up of seven Labour MPs and four Lib Dem and Tory MPs, said a pause in the implementation would “allow for better formulation of tax policy and provide the government with an opportunity to convey a positive long-term vision for farming”.

A delay would also protect vulnerable farmers who would have “more time to seek appropriate professional advice”, the MPs said.

farmers protest in central london over inheritance tax - SN screengrab
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There have been multiple protests

The MPs raised concerns the change was announced “without adequate consultation, impact assessment or affordability assessment”, leaving the impact on farms and food security “disputed and unclear”.

More on Inheritance Tax

They said it risks producing “unintended consequences” and threatens to “affect the most vulnerable”.

The MPs have called on the government to consider alternative reforms.

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Typical family farm ‘would have to spend 159% of its profits for a decade to pay’ tax

Chair of the EFRA Committee Alistair Carmichael said the government should pause and reconsider the farmers' inheritance tax changes
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Chair of the EFRA Committee Alistair Carmichael said the government should pause and reconsider the farmers’ inheritance tax changes

Alistair Carmichael, the Lib Dem chair of the committee, told Sky News: “There is a need for inheritance tax to be reformed.

“The use of land purchase by the super rich as a means of sheltering their wealth is something which is not in the public interest or farmers.

“But this is not the way to go about reform.

“The risk is you see farmers selling out, they will sell out to people who are not going to use land for food production then we risk losing food security – we’ve seen how foolish relying on exports is after Putin’s invasion.”

Jeremy Clarkson arrives in central London to join the farmers protest over the changes to inheritance tax (IHT) rules in the recent budget with introduce new taxes on farms worth more than ..1 million. Picture date: Tuesday November 19, 2024. PA Photo. Farmers have reacted over the inheritance tax changes for farming businesses, which limit the 100% relief for farms to only the first ..1 million of combined agricultural and business property. For anything above that, landowners will pay a 20% tax rate, rather than the standard 40% rate of inheritance tax (IHT) applied to other land and property. PA Photo. Photo credit should read: Aaron Chown/PA Wire
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Celebrities such as Jeremy Clarkson have drawn attention to the outrage

He added “as an outsider looking in”, the way in which the Treasury handled the inheritance tax announcement, after Labour said in opposition they would not change it, “has created a real problem of political authority” for Environment Secretary Steve Reed.

“It’s a problem the Treasury themselves can solve,” he said.

“Their own backbenchers increasingly think they should solve this and our report today gives them an opportunity to do that if they choose to take it.

“It really is up to the Chancellor of the Exchequer. It is over to her now.”

The committee report says before the autumn budget 70% of farmers felt optimistic about their futures, but that fell to 12% after the budget.

The survey, by the Farmers Guardian in March, also found 84% of farmers felt their mental health has been affected by the announcement.

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Key points from the budget

Farmers said the government announcing the closure of applications to this year’s sustainable farming incentive with just hours to go, was also a cause.

The committee said there are other ways to achieve reform, and called on the government to publish its evaluation and rationale for not following alternative policy measures.

They also said the Department for the Environment, Food and Rural Affairs has a pattern of “poor communication and last-minute decision-making following rumours and departmental leaks”.

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Starmer condemned for telling MP ‘she talks rubbish’

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Starmer condemned for telling MP 'she talks rubbish'

Sir Keir Starmer should have reassured and explained his immigration policy to a senior Welsh MP rather than telling her “you’re rubbish”, Labour peer Harriet Harman said.

Speaking to Beth Rigby on the Electoral Dysfunction podcast, Harriet Harman criticised the prime minister for telling Plaid Cymru Westminster leader Liz Saville Roberts during PMQs “she talks rubbish” after she called him out for using “island of strangers” in his immigration speech on Monday.

Baroness Harman said: “He should have actually explained ‘look, this is what we’re getting at. We’re it’s a communitarian message, it’s about neighbourliness, it’s about integration’.

“And he should have done that and reassured her and explained rather than just slapping her down.

“I just think to call across the chamber, ‘you’re rubbish’ – I think a prime minister has the opportunity to be a bit more magisterial in that.”

She said she has “been that woman standing there asking the prime minister a heartfelt and serious question, and had the prime minister say, ‘you’re rubbish'”.

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Starmer’s speech divides opinion

Baroness Harman added: “I kind of went ‘ouch’ at that point, because I’ve been in that situation myself.

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“I think people do want an explanation and he’s got an explanation and he should have done that rather than hit at the messenger.”

After Sir Keir used the phrase “island of strangers” while announcing a crackdown on immigration, fellow Labour MPs, businesses and industry reacted angrily.

The rhetoric was likened by some critics to Enoch Powell’s rivers of blood speech.

Ahead of PMQs on Wednesday, Cabinet Office minister Pat McFadden tried to move the debate away from Sir Keir’s controversial remarks.

“I think we should focus on the policy,” he told Sky News.

“Immigration has contributed a huge amount to the UK, it will in the future, I think the public want a sense of rules around it, that is what the prime minister was speaking about.”

He said the row was “overblown” and he might use the “island of strangers” phrase “depending on the context”.

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