Right hand, meet the left hand

Will changes made by the Care Standards Act make it harder for
working parents to find and keep work, by changing the benefit
rules?

The Care Standards Act 2000 mainly concerns standards in
residential homes, whilst benefits and work are the responsibility
of the new Department of Work and Pensions (DWaP). So what exactly
is the link? One consequence of the Care Standards Act is that
Ofsted (in the form of child care inspectors) take over
childminding registration from September 2001. This creates a
problem.

A welfare rights worker in the North East of England recently
received a call from an early years worker. The early years worker
had attended training sessions on working families tax credits. She
had learned all about the extra help in WFTC for child care costs
(now worth up to £140 per week for families with two
children).

The key to that help is that the child care has to be “official”
– ie registered childminders, after-school clubs, holiday
play-schemes etc. A working parent who pays their mother to look
after the children cannot normally apply for the child care tax
credit. However, if the grandparent is registered as a childminder,
the position changes and the extra credit can be claimed.

In many areas, there is a shortage of childminders/nurseries
etc, so many early years teams have been promoting this option and
have been successful in getting relatives to register so that the
parent can claim the extra tax credit, which makes employment a
better option. The shortage of childminders, particularly in
deprived areas, has been identified by the Department for Education
and Skills (DES) as a major factor in inhibiting employment. So
much so, they even introduced a “bridging grant” scheme earlier
this year whereby childminders are paid a retainer fee by early
years teams in the most disadvantaged areas so that they were not
lost to childminding when between placements.

Yet both the child care credit and the bridging grant are being
undermined. Ofsted are relying on section 79(A)(3) Chapter 14 of
the Care Standards Act, which says that relatives can’t
register as childminders, unless they also care for other children
who are not relatives. Ofsted have said that those grandparents who
are currently registered may have their registration removed.

This will make it much more difficult for parents to find
suitable child care and get help with the cost of it. All the
research shows that parents have greater trust in care provided by
relatives. So long as those relatives meet the registration
standards, what is the problem with them being treated as
childminders?

The Inland Revenue (which administers WFTC), the DWaP
(responsible for similar child care help within housing benefit)
and the DES are all powerless as Ofsted uses the Care Standards Act
to hamper employment opportunities for working parents.

The bridging grant is also being undermined by the benefit
system. Childminders legitimately combine childminding with income
support at present. Because the bridging allowance is paid at times
when the childminder has no children placed with them, it is being
treated by the Benefits Agency as income other than earnings and is
deducted from the childminders income support in full.

So two valuable initiatives, designed to help both minders and
parents, are both being sabotaged by a lack of joined-up thinking
at Whitehall.