Voucher companies call for scheme to be re-opened

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Childcare voucher providers are ramping up their campaign to re-open the scheme to parents.

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Some parents on maternity leave when the scheme closed have been locked out of the childcare voucher scheme

Since the scheme closed to new entrants on 4 October 2018, the Childcare Voucher Providers Association (CVPA) has been contacted by hundreds of parents via email and social media frustrated because they are unable to sign up for them.

All parents with children born after this date, families not registered prior to it, and current users who change employers are unable to access vouchers.

The CVPA wants the scheme re-opened to ensure working families have a greater choice and flexibility of childcare support to suit their needs.

The association is carrying out more detailed research with parents locked out of the scheme, current users of it, employers and providers, which it expects to publish soon.

It argues that the Government closed the scheme without conducting a proper analysis of the ‘winners and losers’, despite a recommendation to do so from the Treasury select committee.

More than 119,000 parents signed a petition to keep vouchers open last year.

Tax-Free Childcare, the Government’s replacement for vouchers, has so far failed to attract the number of parents the Government expected.

Official government figures published last month showed that only a fifth of the predicted numbers had signed up to TFC.

Analysis of figures by Labour in November showed that projected spending on TFC will be £600 million lower over the next four years, due to low take-up.

The CVPA wants the Government to use the underspend from TFC to reopen vouchers indefinitely, or at least until a proper analysis on the impact of closing vouchers has been published.

Campaigners also argue that vouchers benefit lower earners by basing qualifying support on income, while Tax-Free Childcare benefits higher earners by basing qualifying support on expenditure, making it regressive and of greater benefit to those with higher childcare costs.

Many parents are ineligible for TFC who could have accessed childcare support through vouchers, for example a two-parent household where one parent has lost their job or is caring for a relative, or families with children aged 12 or over.

They also say that vouchers support parents back into work or to increase their hours gradually because they are able to combine them with tax credits or universal credit. Parents could then move on to vouchers exclusively, before moving on to TFC as their hours and childcare costs increase.

Existing users of childcare vouchers are also frustrated because they say they are unable to change jobs or progress in their careers because they cannot transfer vouchers to a new employer, even if theirnew job offers childcare vouchers.

One parent told the campaign, ‘As I would change employer after the scheme’s closure, I will not be entitled to sign up to childcare vouchers at my new employer. With other financial losses, it is likely we will be forced to stay with my current employer despite having limited ability to develop as a female professional engineer, whilst also being a single mum. I will also be forced to suffer the increasing negative impact on my mental health caused by issues with my current employer.’

Jacquie Mills, chair of the CVPA said, ‘Too many parents are locked out of work because of rising childcare costs and insufficient childcare support.

'Unfortunately, the closure of the Childcare Voucher scheme in October 2018 has only made this situation worse. Parents are now stuck with Tax-Free Childcare which is overall less generous, more hassle, and regularly unreliable. 

‘It’s clear that now – more than ever – working families deserve greater choice of childcare support that helps them financially and encourages them to stay in work. The government should seize this opportunity by reopening the childcare voucher scheme, so no parent has to choose between work and family.’

Meanwhile, the Government says that TFC is fairer than childcare vouchers and available to nearly 1 million more families than those using vouchers, including the self-employed.

Parents’ views shared with CVPA

‘I work as a teacher and had my first child in August last year. Having been off on maternity leave I was unaware of the Childcare Voucher scheme stopping. I am both shocked and disappointed that parents are missing out and being disadvantaged due to the timing of when we hadour children. Why should some people receive the benefit and others not? What incentive is this for me to return to work, when my wages will be in on one hand and out to childcare on the next?’

‘I’m starting a new job in January [2019] and despite having childcare vouchers for almost three years in my current job, I’ll be considered a new entrant in the Government’s eyes and denied this support. This isn’t just an inconvenience, it’s a financial blow.’

‘I am disappointed to have missed out on thousands of pounds worth of support because of the closure of the scheme. I thought I had signed up while on maternity leave in February 2018, but unfortunately it didn’t work due to a technical error. Just after the deadline I found out that I had not in fact joined. My husband had a similar experience due to lack of support from his employer.’

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