Parents financially worse off since childcare voucher scheme closed, finds survey

Nearly a year on since the childcare voucher scheme closed to parents, the Childcare Vouchers Providers Association (CVPA) surveyed parents, childcare providers and employers across the country about the impact it has had on them.

• Tax-Free Childcare glitch leaves providers with an 'admin impossibility'
• Guide to: Tax-Free Childcare Vs Vouchers

Of the 18,686 parents that took part in the survey, nine in ten were unable to benefit from the vouchers.

A total of 40 per cent said they are less likely to return to work and 84 per cent are reconsidering their future career plans as a result of the closure of the childcare voucher scheme.

The survey also found that more than 60 per cent of parents who have signed up for Tax-Free Childcare (TFC) find the process ‘problematic, unclear and confusing’.

Only one-fifth said they found TFC easy to use.

It follows the publication of official figures showing the number of parents using TFC is far lower than the Government had estimated.

According to the CVPA, if the take-up of the scheme continues at the same rate, it will be April 2021 before the Government hits its target for Tax-Free Childcare, three years and eight months behind schedule.

The CVPA also surveyed 808 employers and 1,130 childcare providers.

The findings reveal:

• More than half of childcare providers say the closure of the voucher scheme has made it harder for parents.
• Just 5 per cent of nurseries prefer Tax-Free Childcare to childcare vouchers.
• 50 per cent of employers have seen a reduction in employee satisfaction since the closure of the voucher scheme to new parents.
• 97 per cent of employers would reopen the voucher scheme.
• 60 per cent of employers recorded higher staff satisfaction among staff receiving childcare vouchers than those using TFC.

In light of the findings, the CVPA has renewed its call for childcare vouchers to be reopened to new entrants.

Comments

Chair of the CVPA Jacquie Mills said, ‘The voices of parents coming through our survey couldn’t be clearer – childcare support has to provide flexibility and choice, allowing parents the opportunity to decide what works best for them.

‘It also needs to break down the barriers to career progression, extending opportunities to working parents, and enabling employers to attract the talent they need.

‘Finally, it has to be simple and effective – that’s why we still support reopening the childcare voucher scheme. This would be the best option to achieve all these aims, aligning with the Government’s objectives to support working families and helping businesses thrive.’

Chief executive of Working Families, Jane van Zyl, added, ‘This report confirms that the closure of the Childcare Voucher scheme is bad for employers and bad for parents. The Government’s decision to close the scheme was disappointing — not least because in the workplace, vouchers allowed employers to start conversations with parents about their family - friendly working policies and practice more broadly.

‘Working Families continues to call for childcare vouchers to reopen, running alongside tax-free childcare, to allow parents the maximum amount of choice and enable them to choose the scheme that offers them the most support and helps them balance work and caring for their children in the way that works best for their families.’

Purnima Tanuku, chief executive of National Day Nurseries Association (NDNA), said, ‘This survey shows how popular childcare vouchers were with parents and providers. The scheme put parents in control and was straightforward for nurseries.

‘Tax-Free Childcare is in a £600 million underfunding crisis, much lower than expected, due to low take-up of the scheme. Recent issues in the Tax-Free Childcare system have shown that it still needs investment to make sure it works for everyone.’

An HMRC spokesperson said, 'Tax-Free Childcare is available to working parents regardless of where they work and includes the self-employed, making it fairer and more accessible than vouchers – which are only offered by some employers. Many, such as the self-employed, can now receive support with their childcare costs for the first time.

'It’s paid per child rather than per parent, so single parents can access the same support as couples, and parents get more support as their childcare costs rise.

'Parents who are already getting vouchers can continue to do so, as long as they stay with the same employer and they continue to run the scheme.'