Low-income parents to get more help with childcare costs

CHILDCARE support for low-income parents will be increased in the Chancellor’s Budget next week.

Jeremy Hunt is under pressure to reform the system after childcare was shown to be among the most expensive in the world.

MPs on the Commons education committee heard a warning that there will be only 1,000 childminders left in England by 2035 under the current system. Labour yesterday laid out a £18billion reform plan, but were criticised for failing to reveal how it would be funded.

Ahead of next Wednesday’s Budget, Treasury sources have revealed the Chancellor is looking to increase how much parents on Universal Credit can claim back for childcare. The maximum level has been frozen since 2006 – an effective 56 per cent real-terms cut – at £646 per month for one child, or £1,108 for two or more children.

But the average cost for a part-time nursery place for a two-year-old has leapt to an ‘eye-watering’ £1,250 per month, or £15,000 per year, children’s charity Coram said.

Poorer families may also be offered upfront payments, rather than claiming in arrears. Meanwhile Labour announced that they would ‘not invest in a broken system’ but look at wholesale reform, calling it a ‘bold and ambitious vision’.

Former Cabinet minister Theresa Villiers said: ‘The cost of childcare is high in this country compared to many places. It must be keeping women out of the workplace. It’s certainly shortening the hours they feel willing to do.’