Source · Select Committees · Work and Pensions Committee
Fourth Report - Universal Credit and childcare costs
Work and Pensions Committee
HC 127
Published 20 December 2022
Recommendations
1
Deferred
Para 19
The Department is currently exceeding its expected proportion of claimants in receipt of childcare support,...
Recommendation
The Department is currently exceeding its expected proportion of claimants in receipt of childcare support, but it admits that some low-income parents still have difficulty accessing appropriate childcare, for reasons both within and outside its direct control. We recommend the …
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Government Response Summary
The Department is reviewing the considerations as to the usefulness of more regular publications of UC childcare data and will keep the committee informed on this decision. Research on 'why take-up isn't higher' has been concluded but is still being quality assured.
Department for Work and Pensions
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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 …
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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.
Department for Work and Pensions
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3
Acknowledged
Para 35
Households claiming Universal Credit are, by definition, amongst the poorest households in the country, yet...
Recommendation
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. …
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Government Response Summary
The Department works closely with other government departments, especially with DfE to look at ways to support parents back in to work and progress in work. By September 2025, eligible working parents of children aged 9 months to when they start school will be able to access 30 hours of free childcare in England.
Department for Work and Pensions
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5
Rejected
Para 44
We recommend the Government amend the regulations on the use of the Flexible Support Fund...
Recommendation
We recommend the Government amend the regulations on the use of the Flexible Support Fund so that receipts for payments made from the Fund can be submitted as if the parent had paid the childcare costs themselves. This would have …
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Government Response Summary
The government will not amend regulations on the use of the Flexible Support Fund, stating that it would not want to risk introducing a reporting system to such a granular level of detail that may drive undesirable behaviour across Jobcentres.
Department for Work and Pensions
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7
Not Addressed
The UC childcare offer is, in some ways, more generous than the system it replaces,...
Recommendation
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 …
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Government Response Summary
The response describes work to promote the use of UC childcare and support Work Coaches understanding rather than uprating the childcare cost caps.
Department for Work and Pensions
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10
Accepted
Para 76
Work Coaches already receive training on childcare support for UC claimants, but given the range...
Recommendation
Work Coaches already receive training on childcare support for UC claimants, but given the range of schemes available, the way that payments and suitable options can change with a claimants’ circumstances, and the need for timely information, there is a …
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Government Response Summary
The Department has been promoting the use of UC childcare and the FSF and ensuring guidance is in place and have also put in place Childcare Champions and Subject Matter Experts in regions to support Work Coaches, so they are not considering having Specialist Work Coaches in every Jobcentres.
Department for Work and Pensions
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11
Rejected
The range of childcare support schemes available to parents is complex, and they need access...
Recommendation
The range of childcare support schemes available to parents is complex, and they need access to good quality, timely information to make the best decisions about 48 Universal Credit and childcare costs their finances. We recommend the Department for Work …
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Government Response Summary
The Department does not agree with the Committee that developing specific calculations on payments for UC childcare would be beneficial for claimants and feel that it could be misleading.
Department for Work and Pensions
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13
Deferred
Para 86
We recommend that the Department for Work and Pensions consult providers on a way that...
Recommendation
We recommend that the Department for Work and Pensions consult providers on a way that costs can be split evenly for people claiming Universal Credit childcare support.
Government Response Summary
The Department for Work and Pensions does not intend to consult with childcare providers, redirecting responsibility to the Department for Education.
Department for Work and Pensions
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Conclusions (6)
4
Conclusion
Accepted
Para 43
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 …
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.
6
Conclusion
Acknowledged
DWP maintains that it does not collect or publish regular statistical updates on uses of the Flexible Support Fund, on the basis that it does not want to detract from its discretionary nature. The FSF is a core element of support for working parents, and without this data, the Department …
Government Response Summary
The Government recognises that high childcare costs can be a barrier for parents to take up paid work and is increasing the UC childcare maximum amounts (caps) of childcare costs payable to eligible UC claimants, with a provisional implementation date of summer 2023.
8
Conclusion
Acknowledged
Para 66
There are a wide range of childcare support schemes available to people claiming Universal Credit, all with different eligibility criteria and application systems. We heard in this inquiry that it continues to be very difficult for parents to understand what the best childcare option for them is, and how this …
Government Response Summary
The government acknowledges the difficulty for parents to understand childcare options, and states that the awareness campaign continues and there is a wide variety of information that covers all the Government childcare offers on the Childcare Choice website. The government does not agree that developing specific calculations on payments for UC childcare would be beneficial.
9
Conclusion
Deferred
Para 75
The Government offers support on childcare options: notably, the Childcare Choices website and via Jobcentre Plus Work Coaches. DWP told us that Work Coaches receive training in advising UC claimants on their childcare options, but our evidence suggests further work is needed. We also heard that currently, UC claimants referring …
Government Response Summary
The Department states it does not have any jurisdiction to work with childcare providers and therefore, does not intend to consult with providers, as the regulation of childcare lies solely within the DfE remit. The current system of paying childcare costs on receipt of actual costs paid protects the claimant from getting into debt.
12
Conclusion
Acknowledged
Para 85
It is evident that the current system for receiving childcare reimbursements is failing those on Universal Credit, and often leads to further debt and/or compromising circumstances. Variable childcare costs are unfortunately unavoidable due to differing costs during term time and out of term, but the Government and childcare providers can …
Government Response Summary
The government recognizes that high childcare costs can be a real barrier to parents taking up employment or increasing their working hours and shares some of the concerns that the Committee highlights.
14
Conclusion
Deferred
We heard some evidence on how the Department for Work and Pensions could improve or alter conditions in the childcare industry. But we recognise that much of the responsibility for childcare policy sits outside DWP, in the Department for Education. In particular, we heard evidence on whether childcare ratios for …
Government Response Summary
Acknowledges responsibility for childcare policy sits outside DWP, in the Department for Education.