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Opinion: Debate - Should the Government overhaul child tax credits?

1 min read
In a new report, the Child Poverty Action Group says the Government tax credit system, introduced last year, is confusing and families are left with little to live on when overpayments are reclaimed. David Quainton reports

YES - Rosemary Murphy, chief executive of the National Day Nurseries Association

The problem is flexibility. If parents' circumstances change, it can take months for the system to catch up. If money was paid directly to the provider, it would prevent this. The Government's argument is that parents should have the freedom to choose. But it always impacts on the provider when the parent doesn't make the wisest decision. What I see is not fraud, but mismanagement. People get into situations where they are in trouble and don't face up to it.

YES - Vidhya Alakeson, research fellow, Social Market Foundation

Parents still contribute 30 per cent of the cost of childcare, so for low-income families that's a considerable outlay. The system creates a lot of uncertainty around funding and, particularly in disadvantaged areas, it doesn't bridge the gap between the cost of providing services in a sustainable way and what providers expect to get.

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