Mixed reaction to new childcare plan

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The new Government scheme for childcare payments has attracted plaudits for its wholescale nature but drawn criticism due to the fact that its limited introduction won’t be for another two years.

The new childcare plan, announced by the Treasury today, will be phased in from autumn 2015 and will be worth up to £1,200 per child, provided both parents are in work and each earning less than £150,000. It will extend support compared to the current childcare voucher scheme, the Government claims, though those who wish to continue with the present scheme will be able to do so.

Initially, the scheme will include only children under five years old, or 1.3 million families. However, over time, it is promised the scheme will include children under 12.

While the details have garnered support from those looking to address the high cost of childcare, some groups have criticised the limitations of a scheme that expects both parents to be in work.

Sarah Jackson, chief executive of the charity Working Families, said she was concerned that the new scheme does not address the gap in childcare filled by employer-supported vouchers that supported families when one parent was studying, retraining, or had been made redundant.

“It also seems strange that low-income families remain in a means-tested scheme, while higher-income families get a non-means-tested system,” she said, “and even though we’re pleased to see more help for those on universal credit, we would also like to see 85% costs paid for those in low-paid, part-time work. The announcement today doesn’t appear to provide extra help to those on the lowest incomes.”

The Childcare Voucher Providers Association (CVPA) welcomed the extension of childcare support to the self-employed, and the fact that users of the existing scheme will continue to be able to benefit from it on the same terms, even after the new scheme is introduced.

However, its spokesman Julian Foster said the CVPA is concerned that the changes will not reach parents soon enough: “Many parents will be very disappointed that the proposals will offer them no immediate help.”

“The Government could still introduce sme simple measures now, such as increasing the tax-free limit for childcare vouchers from the start of the new tax year and introducing a right to request the scheme from their employer, which would help working parents straight away.”

Iain McMath, managing director of childcare voucher provider Sodexo Motivation Solutions, said the new scheme’s 2015 introduction was problematic: “The Government should be doing everything it can to encourage parents back into full-time work right now. Instead, it has chosen to dangle a carrot that is two years out of reach, with a solution that won’t leave parents dramatically better off.”

Frequently asked questions on childcare

Why is it beneficial for employers to offer employees assistance with childcare?

Further XpertHR resources

Ensuring compliance with the law on childcare vouchers – a guide

Benchmark your organisation by comparing the percentage of the eligible workforce that takes part in a childcare vouchers scheme?

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