Select committee: Work and Pensions Committee
Recommendation 7
Fourth Report - Universal Credit and childcare costs
Published 20 Dec 2022
Paragraph 60
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)
The UC childcare offer is, in some ways, more generous than the system it replaces, as it offers a higher percentage reimbursement. However, support for childcare for some of the poorest families in the country has failed to keep pace with inflation because the maximum cap of childcare that can be claimed for has stayed at the same level since 2005. This is particularly pertinent given the current rate of inflation and cost of living crisis, which the Government has recognised in uprating benefits, and the benefit cap, in the Autumn Statement. We recommend the Government uprate the childcare cost caps to better reflect the true cost of childcare in 2022 and then index them annually.
From: Work and Pensions Committee, Fourth Report - Universal Credit and childcare costs (HC 127), paragraph 60, 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.