Savings from Tax-Free Childcare delay should be used to expand provision

The Family and Childcare Trust is calling on the Government to invest the £535 million savings from delayed Tax-Free Childcare as capital funding, so that local authorities and providers can offer more flexible places.

It its new report, ‘Investing in Flexible Childcare’, the charity argues that the savings achieved from the delay to the roll-out of Tax-Free Childcare should be used to make sure childcare settings are able to offer the 15 free hours, and from next year the 30 hours, when working parents need them.

The Tax-Free Childcare scheme was due to start in the autumn, but it has been delayed until early 2017 following a legal challenge from the childcare voucher provider companies.

The Family and Childcare Trust is concerned that when the 30 free hours come in, parents will have problems finding childcare at times that suit them.

A Government review into the funding of the free places is currently underway.

The Family and Childcare Trust wants the money from Tax-Free Childcare to be used as capital funding directed at local authorities and childcare providers to enable them to provide more flexible places.

It is in reaction to existing research that shows access to childcare places, as well as affordability, are the biggest barriers to parents taking up more hours at work or for those that are without a job taking up paid employment.

The charity claims that re-directing the capital funding would help up to 933,000 children of working parents access flexible childcare each year.

The figures are based upon the proportion of three and four-year-olds who stand to benefit from the 30 hour offer – assumed to be 56 per cent and 58 per cent of the age cohort respectively using Labour Force Survey and ONS population projections for 2015/16.

'Investing in Flexible Childcare' goes on to cite figures from the Family and Childcare Trust's annual Childcare Costs Survey, which showed that 43 per cent of local authorities in England do not have enough childcare provision for working parents. For parents working atypical hours or irregular shifts, the figures fall to 14 per cent. Only 27 per cent of local councils in England and six per cent in Wales report having enough holiday childcare for working parents.

Alongside the report, the Family and Childcare Trust has launched a petition for parents to support their call for the money from the delayed Tax Free Childcare scheme to be re-directed.

Julie Margo, chief executive of the Family and Childcare Trust, said, 'The expansion of free childcare is really positive news for parents, but we're concerned that right now parents are struggling to access the existing 15 hours of free childcare because provision is so inflexible.

'The savings from the delay of the tax free scheme should be invested in flexible free childcare, so that local authorities and childcare providers are able to meet the needs of thousands ofworking families expected to take up the 30 hours offer.

'We want the Chancellor of the Exchequer to use the Autumn Statement to reaffirm the Government's commitment to supporting working parents struggling to pay for and find the childcare they need.'

While the Pre-School Learning Alliance has welcomed the Family and Childcare Trust's call, it says the primary focus of reallocation of funds from the delayed Tax Free Childcare should be used to plug the current shortfall in funding.

Chief executive Neil Leitch said, 'We welcome the report's call, however while capital funding is vital to the long-term viability of any early years business, given that research commissioned by the Alliance last year revealed a current funding shortfall of £354m for PVI settings alone, it's clear to us that revenue funding – and more specifically, plugging this gap across the sector as a whole – should be the primary focus of any reallocation of resources.

'This is even more critical in light of Government plans to extend the three- and four-year-old free entitlement offer to 30 hours from next year, and the additional financial pressures this will inevitably put on providers already struggling to stay afloat.

'Ensuring adequate funding will enable providers to develop far more sustainable business models, which in turn, will lead to long-term improvements in areas such as flexibility of provision and workforce development, the importance of which are rightly highlighted in the report.'

Liz Bayram, chief executive of the Professional Association for Childcare and Early Years, said, 'We support the Family and Childcare Trust (FCT) in its call for the money saved from the delayed roll out of the tax free childcare scheme to be reinvested in the sector.

'With parents increasingly working atypical hours, and the rise of zero hours contracts, families need to be able to access high quality childcare across a range of settings that suit the practical needs of the family, as well as what is best for their children.
'Childminders in particular, who offer one of the most flexible childcare options, need to be encouraged to  offer the free entitlement, through  removal of red tape, prompt access to payment, and the removal of the ban on claiming for related children.'

A Treasury spokesperson said, 'The Government is committed to providing more childcare support to parents. That’s why we are providing an additional 15 hours free childcare to working families and have committed to increasing the average childcare funding rates paid to providers as part of the Spending Review.'

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