Boost in free childcare to get women back in work

TENS OF thousands of women could return to the workforce under a massive expansion of free childcare.

Jeremy Hunt announced that 30 hours a week of paid- for care will be extended to children of working parents aged from nine months to four years from September 2025.

This will save the average family with a toddler in nursery more than £80 a week – but parents with multiple young children or who live in the more expensive SouthEast will benefit even more.

Forecasts suggest the multibillion-pound policy will bring another 60,000 parents into work by 2027/28, and Mr Hunt hopes parents already in work will increase their hours. The Chancellor told MPs: ‘We have one of the most expensive systems in the world.

‘Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

‘For many women, a career break becomes a career end. Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands.

‘If we matched Dutch levels of participation, there would be more than one million more women who want to work in the labour force. And we can.’ The Government estimates around 435,000 people in England with a child under three do not work due to caring responsibilities.

Mr Hunt said the extension of the 30 hours offer would be worth an average of £6,500 every year for a family with a two-year- old child using 35 hours of childcare every week, reducing their childcare costs by nearly 60 per cent.

Currently, working parents of three and four-year- olds are eligible for 30 free hours a week unless one parent earns more than £100,000 a year. But two-year- olds are only entitled to 15 free hours a week if their parents claim certain benefits.

The policy will be rolled out in stages, with working parents of two-year-olds able to access 15 hours per week from April next year. From September 2024, all working parents of children aged nine months to three years can access 15 hours per week. From September 2025, eligible parents of under-fives will be given 30 hours free per week.

Mr Hunt also announced more funding to childcare providers to deliver the existing free hours offers, with £204million extra this year, increasing to £288million in 2024/25. And the Government will pilot start-up grants of up to £1,200 for new childminders in a bid to address vacancies. Staff- to- child ratios for two-year- olds will rise from 1:4 to 1:5 to give providers more flexibility.

There will also be an expansion in care at the start and finish of the school day for parents with older children, from September 2024.

But the Institute for Fiscal Studies last night warned the extension of free childcare would exacerbate ‘one of the most severe distortions’ in the tax and benefit system.

This is because the generous provision of free hours ends abruptly once one parent earns more than £100,000.

‘60,000 parents to return to jobs’

‘Ministers have heard our cry’

The IFS said: ‘A parent with a one-year- old and a threeyear-old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income falls by £14,500 if their pre-tax pay crosses £100,000.

‘Disposable income would not recover its previous level until pre-tax pay reached £134,500. A parent earning £130,000 would be worse off than one earning £99,000.’

Joeli Brearley, founder of campaign group Pregnant Then Screwed, said: ‘Parents of young children felt ignored, but this will restore their faith in democracy, so we thank ministers for hearing our cry.’

But she stressed that attracting more childcare workers was critical.