Source · Select Committees · Education Committee
Recommendation 1
1
Acknowledged
Paragraph: 18
Spring Budget missed opportunity to reform tax-free childcare and enhance system flexibility
Conclusion
The Spring Budget announcements are a welcome sign that the Government has realised that urgent care and attention is needed in the childcare and early years education market. We particularly welcome the additional funding for Universal Credit entitlements and the additional investment in extending the subsidised hours, but feel that HM Treasury missed an opportunity to reform tax-free childcare and increase the flexibility of the system.
Government Response Summary
The government welcomes the report and acknowledges the committee's appetite for further system change. It highlights the significant investment and transformative reforms announced in the Spring Budget 2023, including increased Universal Credit entitlements and extended subsidised hours, as its commitment to improving childcare.
Paragraph Reference:
18
Government Response
Acknowledged
HM Government
Acknowledged
2. The Government welcomes the Committee’s report into support for childcare and the early years, and we have considered the findings and recommendations of the report carefully. We recognise, as the Committee has, that the early years of a child’s life are critical for their development and will shape their lives for years to come, and we are committed to ensuring all families get the support they need when they need it. This includes providing children and families with access to high quality early education and childcare, helping children to learn in their earliest years, providing enriching experiences around school hours, and supporting a functioning economy by enabling parents to work. 3. That is why the Government is bringing forward a number of measures to improve access to early years and childcare, closing the gap between parental leave ending and the current childcare offer. At Spring Budget in March 2023, the Chancellor announced the single biggest investment in childcare in England ever, with a reform programme that includes: • Removing one of the biggest barriers to parents working by vastly increasing the amount of free early education that working families can access. By 2027–28, the Government will be investing an additional £4.1 billion a year to fund 30 hours of free early education for children aged nine months to two years, where eligibility will match the existing 3–4-year-old 30 hours offer. • From September 2023, the funding paid to early years providers for the existing free hours offers increased by £204 million, rising to £288 million in 2024–25. ... • To help parents on Universal Credit in Great Britain who are moving into work or looking to increase their working hours, we have made sure they have support with childcare costs upfront. Government has also boosted Universal Credit childcare maximum (caps) to £951 for one child and £1,630 for two children–allowing parents to claim back over £300 more for one child or over £500 for two or more children of their childcare costs per month. ... 128. The Government is in full agreement with the Committee on the value and significance of childcare and early education and acknowledges the Committee’s appetite for further system change. The Government’s commitment to going further in improving the system was signalled through the Spring Budget announcement in March 2023, which set out transformative reforms to childcare alongside market reforms to ensure the system is set up for success.