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Nurseries and other registered childcare premises will no longer have to pay business rates, the Welsh Government has announced.

Since 2019, premises like day nurseries have not had to pay business rates in Wales thanks to the small business rates relief scheme.

Now, this relief has been introduced permanently – with the Welsh Government estimating it will save the industry £3.4m a year.

Merthyr Tydfil and Rhymney’s Labour MS Dawn Bowden is the Welsh Government’s minister for children and social care. She said: “Childcare settings provide an essential service in Wales, offering nurturing environments for our children and helping parents to access employment, education or training.

“But we know that the sector is under significant pressure and in need of ongoing support to meet their costs.”

Ms Bowden said permanent rates relief “will be a huge boost to the sector, providing stability and helping providers reinvest savings back into their business to continue delivering high quality and affordable childcare”.

She added: “It is the right thing to do for our children, parents and providers now and for the future.”

The announcement forms part of a £100 million annual investment into “high-quality” childcare, according to Wales’ finance secretary, Mark Drakeford.

He said: “We want the childcare sector to be financially sustainable and this scheme will help reduce the risk of premises closing, meaning that registered childcare premises can continue their vital services and benefit families across Wales.”

Purnima Tanuku OBE, chief executive of the National Day Nurseries Association (NDNA), welcomed the rates relief and said: “Childcare providers across Wales have faced rising delivery costs making it more difficult to remain sustainable while delivering funded early years places.

“Permanently removing the burden of business rates is a positive step to helping nurseries and providing certainty. In making this decision, the Welsh Government is recognising the value of supporting the early years sector.”