Research published today by the Social Market Foundation shows that as a result of growing childcare costs and reduced Government support, working parents are set to pay more from their own pockets to cover childcare costs. The research is supported by The Childcare Voucher Providers Association (CVPA), of which CVS is a founder member.
Key findings show that:
- Low income families in 2015 are likely to pay £600 per year more for their childcare compared to 2006 – almost 7% of their annual income:
- a middle-income family in 2015 is likely to pay £900 per year more; and
- a higher-income family in 2015 is likely to pay £1,400 per year more.
- If childcare costs continue to rise at the current rate, the cost of a typical amount of childcare will be £104 per week in today’s money; a 13.5% rise from 2006.
Ultimately, this means that if we’re to return to the public support levels offered in 2006, the high point for childcare support, the following measures need to be taken:
- The proportion of childcare costs covered in the new Universal Credit would have to increase to 83% (from the current 70%)
- The childcare voucher entitlement for basic rate tax payers would need to increase to £83 per week – it’s currently £55 per week, which has remained unchanged since 2006.
The report clearly demonstrates the consequences if funding continues to drop whilst costs rise. As part of the CVPA we’re committed to promoting the role childcare vouchers can play in offsetting the costs parents are faced with - it’s not just childcare they have to pay for after all and easing that burden will help elsewhere and hopefully help them return to work.
The report will be formally launched today where the SMF will present their findings to members of parliament and civil servants in order to raise awareness of the issues and highlight potential solutions.
I’ll be at the event to represent the CVPA and give the introduction to the session. I’m looking forward to being able to talk about the relevance of childcare vouchers in helping parents meet their childcare demands and how we move forward to ensure parents are not simply priced out of childcare.
You can read the SMF’s report ‘The Parent Trap’ here.