Latest Public Sector News

19.03.13

£1,200 childcare boost announced

Families will receive up to £1,200 a year for childcare support, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg have announced.

Parents not receiving tax credits but earning less than £150,000 will be eligible for vouchers to cover 20% of what they would spend on childcare with a nursery of Ofsted registered childminder.

The funding is aimed to help 2.5 million families earning between £20,000 and £40,000. It will initially cost £1.5bn and focus on children under five, before being extended to those under 12.

Cameron said: “Too many families find paying for childcare tough and are often stopped from working the hours they’d like.”

Clegg added: “The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can’t afford to work.”

Civitas welcomed the extra funding but called for a simpler system for support, based on income splitting to allow parents more freedom. The “cumbersome” voucher scheme could be replaced with a simple tax break, it argues.

Anastasia de Waal, deputy director and director of family and education at Civitas, said:

“It is good to see the Government doing more for working families through childcare vouchers, even though the additional help falls short of what many will be hoping for.

“But at least in the longer term the Government should consider a more straightforward system of tax breaks which can be shared between the two parents, enabling them to better juggle the demands of work and family.

“The main problem with the Government's support at the moment is that it gives a tax break to couples so long as they pay someone else to look after their children.

“It would be better – for both children and the economy – if the Government let parents keep more of the money they have earned so that they can decide whether to care for their own children or pay someone else.”

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