Member News
By Katy Clark - 5th February 2010
It is estimated that around 340,000 parents in the UK benefit each year from the child care vouchers scheme which was introduced by this government in 2005.
There has been much debate about well-off parents benefiting from the scheme, but currently two-thirds of the parents using the vouchers are basic-rate taxpayers. Many of those who qualify are public sector workers, with the health service being the biggest single employer signed up.
At the moment, higher-rate taxpayers benefit more – with each working parent in that position being able to qualify for up to £1,196, each, whereas basic-rate taxpayers can receive £904 per year each.
For many families coping with the soaring cost of childcare, this has made the difference between being able to return to work or deciding it is simply not financially viable to do so. The recently-announced changes to the scheme mean that it will only be eligible at the basic rate of tax for all parents whose employers are signed up, but this still represents significant assistance for working parents.
There will of course always be a debate about universality or targeting, but my view is that as a matter of public policy the state should be giving support for all children, and indeed taking steps to encourage the highest quality of care. Vouchers can of course only be used for Ofsted-approved childcare. I therefore welcome that the vouchers will still be available for higher-rate taxpayers, albeit at the basic rate, as issues of income should be dealt with in other ways through the general taxation system.
We have seen huge improvements in government support for childcare. We should be rightly proud of these vouchers, which offer universal help for parents. In central London, childcare in a nursery will often cost more than £5 an hour – little less than the hourly minimum wage – and the decision to return to work will be a difficult one for many mothers.
The reality is that these vouchers have made the difference, and enabled many women to return to work so contributing to the economy in that way. Whilst these decisions are very much ones for the individual, it is essential that we make work pay to enable it to be an option for parents.
Childcare remains a major problem for many parents, indeed for many Members of Parliament. So as well as seeing the continuation of childcare vouchers, I very much hope the current proposals for a crèche within the Houses of Parliament are successful. I for one will be using it.
Dods Parliamentary Communications Ltd