Source · Select Committees · Work and Pensions Committee
Recommendation 2
2
Accepted
Good quality childcare can have a transformative impact on the lives of children and their...
Recommendation
Good quality childcare can have a transformative impact on the lives of children and their families, and a lack of childcare, or support with paying for it, should never be a barrier to work. Childcare is expensive for all, but the pressures are most acute for low-income families and we recommend the Government increase the financial support it provides to them. Additionally, the Department should assess the childcare funding schemes in Scotland and Scandinavian countries, investigating whether their costs are offset by societal benefits such as increased economic activity, additional tax and personal wellbeing. (Paragraph 20) Upfront costs
Government Response Summary
The government is increasing the UC childcare maximum amounts (caps) payable to eligible UC claimants from summer 2023, increasing them to £950.92 for one child and £1,630.15 for two or more children. However, the department does not intend to conduct a specific investigation into the funding schemes of Scotland and Scandinavian countries.
Government Response
Accepted
HM Government
Accepted
Universal Credit and childcare costs: Government Response 3 UC childcare increase in financial support The Government recognises that high childcare costs can be a barrier for parents in taking up paid work. That is why we are pleased to advise the Committee that the UC childcare maximum amounts (caps) payable to eligible UC claimants will be increasing from summer 2023. The caps are currently set at £646.35 for one child and £1,108.04 for two or more children and will increase to £950.92 for one child and £1,630.15 for two or more children. This should help parents overcome any barriers to moving in to work or when increasing their working hours. The Committee wrote on 15 February 2023 providing an estimate for the cost of implementing an increase in the childcare maximum (caps). The Committee’s estimates of £895 for a single child and £1,535 for two or more children per month are broadly in line to those announced in the Spring Budget noted above. Holiday Activity and Food Programme support More widely, there is additional support available to families, the Holiday Activities and Food Programme which has been successful in helping low-income families in England during major school holidays. The Government will be providing over £200 million a year to local authorities to enable this programme to run until the end of 2024/25. This programme will continue to provide enriching activities and healthy, nutritious meals to help with children’s social skills and wellbeing, while also relieving some of the pressure on family budgets and helping low-income parents to continue work over major school holidays. In addition, Government is committed to continuing support for school breakfasts, and is investing up to £30 million until July 2024. This funding will support up to 2,500 schools in disadvantaged areas, meaning that thousands of children from low-income families will be offered free nutritious breakfasts to better support their attainment, wellbeing, and readiness to learn. Wider DfE Support The Government recognises that childcare is expensive in the United Kingdom by international standards. We are aware that the childcare industry is very labour-intensive, with 75% of costs driven by staffing and there are no easy or quick ways to reduce these costs. We are continuing to explore how we best support the early years sector to recruit and retain the staff it needs. We will work closely with the sector to develop plans to grow, develop and support the workforce. We will invest £204 million in 2023–24 to uplift the rates for existing entitlements, rising to £288 million in 2024–25, with further uplifts beyond this. This ensures providers have the funding they need to deliver the existing free entitlements offers. In addition, to increase the availability of high-quality childcare, DfE are providing start- up grants for childminders to remove a key barrier to them joining the profession. 4 Universal Credit and childcare costs: Government Response However, the department does not intend to conduct a specific investigation into the funding schemes of Scotland and Scandinavian countries. We have previously carried out some internal work looking at international comparisons that focussed on availability and affordability of childcare, this comparison did include Scandinavian countries. The outcome of this work highlighted the high costs for childcare in the UK.