Select committee: Work and Pensions Committee
Recommendation 3
Fourth Report - Universal Credit and childcare costs
Published 20 Dec 2022
Paragraph 35
Addressed to Department for Work and Pensions
Work and Pensions Committee Universal Credit and childcare costs All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
Households claiming Universal Credit are, by definition, amongst the poorest households in the country, yet the childcare support to them via that system requires them to find substantial sums to meet up-front costs: both initially and on an ongoing basis. Other schemes, such as Tax Free Childcare, allow reimbursement in advance despite being aimed at much wealthier households. The Department must solve this obvious barrier to work. We recommend it work with the DfE and childcare providers to produce a solution to this problem, if necessary by establishing a direct payment system modelled on those used elsewhere, such as Alternative Payment Arrangements for housing, or funded childcare hours. If this cannot be achieved within the Universal Credit system, childcare support should be removed from it entirely and a solution based on a single childcare account, such as that used for Tax Free Childcare, should be implemented.
From: Work and Pensions Committee, Fourth Report - Universal Credit and childcare costs (HC 127), paragraph 35, 20 December 2022
Government response
The government responded to the whole report on 31 March 2023 (deadline 20 February 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government recognises that high childcare costs can be a barrier to work and points to changes announced at the Spring Budget, while declining several of the Committee's recommendations, including direct payments to providers.
- It will increase the UC childcare caps, with a "provisional implementation date of summer 2023" (to £950.92 for one child and £1,630.15 for two or more), and says future uprating "will form part of the Departments annual uprating review".
- It will change the Universal Credit Regulations 2013 to exempt any Flexible Support Fund payment made to childcare providers from the UC childcare cost calculation.
- On direct payments, it says it has "no plans to make direct payments to providers", arguing this "would undermine the fundamental aspect of the design of UC".
- It does not intend to investigate Scottish and Scandinavian funding schemes or to consult providers, and is "not considering" specialist childcare Work Coaches in every Jobcentre, citing existing Childcare Champions and Subject Matter Experts.