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Support for parents' childcare costs

The Government has today announced a new set of proposed childcare policies to help parents with the cost of childcare, including Tax-Free Childcare, changes to Universal Credit support and an Early Years Pupil Premium. All of these proposals are due to come into effect from Autumn 2015 or later, following the General Election.

The Tax-Free Childcare scheme will provide 20% support for childcare costs of up to £10,000 per year for each child, via online childcare accounts. This means that the Government will supply 20p for every 80p a parent pays in to the scheme to be paid to a childcare provider of their choice. All parents in the household have to be in at least part-time work (earning over £50 per week) in order to access the scheme.

It was also announced that all families on Universal Credit will be able to receive 85% support on their childcare costs, up from the previous 70%. Finally, an Early Years Pupil Premium will be introduced that will provide those early years settings with extra money to care for disadvantaged 3- and 4-year-olds.

PACEY has already met with the Government regarding their Tax-Free Childcare initiative, and responded to the consultation on the policy in October 2013. We will continue to engage with these proposals as they develop, to ensure the views and concerns of our members are heard.    

Liz Bayram, PACEY Chief Executive, said about these proposals:

“PACEY welcomes the Government’s proposed increased financial support for parents through extension of the tax relief threshold for childcare, and we also recognise that the pledge to meet childcare costs for more families on the universal credit benefit scheme would deliver significant benefits for children living in disadvantage. We know that measures improving access to high quality childcare will help to give more children the best start in life, as well as helping parents to return to work.

“Whilst the Government’s measures to improve access to childcare are positive, it is also important to remember that childcare provision has to be of high quality to benefit children the most, especially those living in disadvantage. PACEY is keen to see a greater investment in the support all childcare professionals receive to improve the quality of their setting; for example, by ensuring that free entitlement funding covers the full cost of its delivery to 3- and 4-year-olds and a growing number of 2-year-olds.”