Childcare subsidies leave many families out in the cold

Large families, single parents and workless households are all missing out on financial help with child care costs, an influential think-tank has warned.

New research published by the IPPR to coincide with the Child Care Bill’s return today to the House of Lords, argues that the current system of childcare subsidies also fails to adequately help families living in high-cost or rural areas, and families with children with disabilities or special educational needs.

The think-tank is calling for subsidies to be made available to an additional 4.7m families by linking them to the child tax credit instead of the working tax credit.

The IPPR predicts that such a change would require an extra £2bn if take-up levels remain the same, and is demanding that childcare and early years spending be made a priority in next summer’s spending review.

“Helping parents with the cost of childcare is an investment for our country,” said director Nick Pearce. “The government has made great strides forward on childcare. It now needs to keep up momentum in the forthcoming spending review and beyond.”

Welcoming the report’s findings and recommendations, National Childminding Association chief executive Liz Bayram added: “To be a truly ‘universal’ service, core government funding for childcare cannot remain static and must be substantially increased to deliver the vision.

“Additional investment of £2bn per year into the child tax credits scheme would address some of the problems families with lower incomes have in accessing and affording high-quality childcare that will benefit the parent and child.”