Source · Select Committees · Work and Pensions Committee
Recommendation 4
4
Accepted
Paragraph: 43
DWP, entirely reasonably, wants to reduce the amount that it loses to fraud via childcare...
Conclusion
DWP, entirely reasonably, wants to reduce the amount that it loses to fraud via childcare payments in UC. However, we have heard that in doing so, by making payments in arrears, it has created an insurmountable barrier to work for some households. DWP’s recent efforts to encourage Work Coaches to make greater use of the Flexible Support Fund to address this problem do not seem to be having the desired effect.
Government Response Summary
The Department will be making a change to the Universal Credit Regulations 2013 to exempt any FSF payment made to childcare providers from the UC childcare cost calculation, which will allow UC claimants to receive a FSF payment in the usual way. Claimants will then submit evidence of that payment (paid by DWP) to claim back that same set of childcare costs within that same assessment period where the childcare has been delivered.
Paragraph Reference:
43
Government Response
Accepted
HM Government
Accepted
Following the announcement at the Spring Statement, we are pleased to advise the Committee that the Department will be making a change to the Universal Credit Regulations 2013 to exempt any FSF payment made to childcare providers from the UC childcare cost calculation. This additional payment will allow UC claimants to receive a FSF payment in the usual way to pay for childcare costs where this enables them to take up a job or significantly increase their working hours. Claimants will then submit evidence of that payment (paid by DWP) to claim back that same set of childcare costs within that 6 Universal Credit and childcare costs: Government Response same assessment period where the childcare has been delivered. so this would support claimants to get into the UC childcare payment cycle sooner. In the Committee’s follow up letter an estimated cost of this measure was provided. In response, the Government’s costings for this measure were estimated by using the current FSF spending on childcare and the number of claimants on flowing to UC each month. This used UC administrative data to estimate the eligible population for increased FSF spending, multiplying the average childcare award by the identified population and increasing it by CPI in future years. The costing accounts for a behavioural response due to the policy supporting more people to use childcare in order to work more hours and earn more. 2022–23 2023–24 2024–25 2025–26 2026–27 2027–28 Exchequer 0 -100 -95 -75 -70 -60 Throughout the financial year spend is reviewed to ensure Departmental goals are achieved, customer needs are met at a local level and that spend remains within budget. The Department is aware of spend being within a range of 0.2% and 11.9% of budget for the period 2016–20. A below budget spend was also shown in the DWP Annual Report & Accounts 2020–