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We need action to reduce the costs of childcare

We need action to reduce the costs of childcare

For many single parents, childcare is the vital cog that helps them to balance work and caring for their family. It makes the difference between being able to go out to work or not. If it’s not available when they need it, or the costs are too high, it can leave them locked out of work or struggling to make work pay.

That’s why the publication this week of the Family and Childcare Trust’s annual report on childcare costs has made for such concerning reading. Alarmingly, the Trust has found that many parents in Britain are now paying more for childcare annually than the average mortgage bill. Full-time childcare costs for a family with a two-year-old and a five-year-old child are estimated at £11,700 a year. These escalating costs are part of a long-term trend which has seen childcare prices rise by nearly 40% in the last 10 years.

These rising prices are leaving parents trapped between a rock and a financial hard place. If they choose to go out to work or increase their hours, a huge chunk of their pay goes straight out on childcare. But if they do stay at home, they sacrifice their income and future career prospects.

For single parents, the choice is particularly stark. Single parents are reliant on a sole income. They are also more reliant on childcare – unable to tag-team on the school or nursery run in the way that couples can. Even with the government covering 70 per cent of childcare costs for single parents under tax credits, many working single parents still struggle to cover the remaining cost and provide for their families’ other needs.

It’s clear we need action to reduce the costs of childcare, but sadly the government’s planned reforms to childcare support look set to throw another financial roadblock in the way of the lowest earning single parents.

Once it is introduced, parents on universal credit who earn enough to pay income tax (more than £10,000), will be able to claim back 85 per cent of the costs of their childcare – a level that we know will make a real difference in making work financially worthwhile. However, parents on the lowest incomes who earn less than £10,000 per year will only be able to claim 70 per cent of the costs of their childcare.
The lowest earning parents will therefore receive the least support.

It is not too late, however, for the Chancellor George Osborne to reverse this injustice. We are calling on the Chancellor to use his Budget on March 19 to invest an extra £200m into childcare so that all parents on universal credit will be able to claim back 85 per cent of their childcare costs, no matter what their income.

If you want to make our call to the Chancellor as loud as possible, you can support our campaign by signing up to our Thunderclap. On 10 March tweets and Facebook posts from hundreds of supporters across the country will be sent out calling on the Chancellor to introduce a Budget that supports low earners with the costs of childcare and makes the government’s commitment to ‘making work pay’ a reality. Join with us in demanding a Budget for Childcare.

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