Wednesday, 7 September 2011

Making work pay – the childcare trap

Dear Graham,

Save the Children and Daycare Trust have surveyed more than 4,000 parents on access to childcare and the impact of childcare costs on family incomes and work prospects. The government’s promise to make work pay is crucial if we are to tackle child poverty. However, the results of our survey have led us to be greatly concerned that, unless more resources are found for support for childcare costs, the government will not be able to deliver on this vital pledge to Britain’s poorest families. Please see the attached briefing for the detail of the survey’s findings.

41% of parents in severe poverty who answered the survey, who have been affected by the cut to Working Tax Credit, said they were thinking of giving up work because of the cut, and 25% are thinking of reducing their working hours. In addition to this cut, under the Universal Credit, which will replace many benefits and tax credits from 2013, funding for childcare will be maintained but eligibility will be extended to include parents working fewer than 16 hours per week. This extension to parents in ‘mini jobs’ is very welcome; however, it will mean even less support for parents working longer hours.

We fear many more low paid parents will be forced to reduce their hours or will be priced out of jobs altogether. We urge the Chancellor to consider investing an extra £600 million per year in financial support for childcare to ensure that 80% of childcare costs are met for parents on Universal Credit, up to current maximum weekly amounts. With this investment, we believe the government will be able to deliver on its promise to make work pay, channelling this crucial extra help to families struggling to earn their way out of poverty.

These findings will be launched at the next meeting of the All-Party Parliamentary Group on Childcare on 14 September from 4:00-5:30pm in the Wilson Room, Portcullis House. Speakers will include Sally Russell, co-founder of Netmums (tbc), representatives from Save the Children and Daycare Trust, and parents who will give their first-hand perspective. We hope that you will be able to join us for this meeting. You may have already responded to an earlier invitation. If you have not and would like to attend, please RSVP to confirm your attendance at or on 020 7012 6689.

If you would like any further information, please do not hesitate to contact me.

Best wishes,
Flora Alexander
Westminster Parliamentary Adviser
Save the Children, 1 St Johns Lane, London EC1M 4AR

Direct Line: 020 7012 6689
Mobile: 07810 637 812