Early years organisations have expressed mixed feelings about the Government's refusal to pay the new version of its childcare tax credit to providers instead of parents.
Some nurseries and childminders have lost thousands of pounds under the scheme, and in a consultation on the tax credit last year early years representative bodies called for the Government to pay the money direct to the care provider. But the third annual conference on Early Years Development and Childcare Partnerships in London last week heard that while the Government has decided to keep paying the money to parents it will also be paid annually rather than on a six-month basis and 'safeguards' will be introduced to ensure the money pays for childcare and nothing else.
Dawn Primarolo, paymaster general, assured the delegates representing partnerships from all over England, 'The next generation of tax credit will be better than the last one because we talked to you.' The Government had received 'mainly anecdotal complaints' about providers losing money under the scheme, she said, but 'when we investigated complaints we found that most (children) were in other forms of childcare we would recognise.'
A Treasury spokeswoman was unable to clarify what Ms Primarolo meant by 'safeguards'. 'This is still being worked on,' she said.
The paymaster general was responding to a question by Louise Farthing, chair of Sunderland EYDCP, who called for the money to be given direct to care providers, due to the level of payment defaults in her area. She said, 'Sustainability is the real issue in areas of deprivation, where one defaulting parent can mean the closure of provision.'
Both Gill Haynes, chief executive of the National Childminding Association, and Rosemary Murphy, chief executive of the National Day Nurseries Association, disputed Ms Primarolo's comment about 'anecdotal complaints'. Mrs Haynes said, 'During the consultation we sent in 200 documented cases of childminders who are owed between 300 and 750, but have heard nothing back. Without that reassurance, we want the money paid direct to providers.'
Mrs Murphy added, 'Dawn Primarolo's comment about defaulters using and paying for provision somewhere else is something none of our members have come across. This sounds "anecdotal" to me.'
One badly-hit nursery is the Magic Roundabout Day Care Nursery in Ballymena, Co Antrim, which has lost about 2,500 in unpaid childcare costs since the childcare tax credit's introduction in 1999. Proprietor and manager Florence Allan said, 'We had no debt defaulters before this scheme was introduced.
'We know of other local day nurseries where parents placed their children for a month then moved on without paying, giving them free childcare for six months. Now we only allow parents to default for one week before telling them their child no longer has a place.'
Stephen Burke, director of the Daycare Trust, called on the Government to reduce the 30 per cent contribution that the poorest parents have to make to childcare costs. He said, 'Childcare and out-of-school services need to be seen as a public good with benefits for society as well as for individual families - not simply a market or employee perk.' The new tax credit will be introduced in April 2003.
