A system of government loans that could help parents meet the cost of childcare is under development by an independent think-tank, CYP Now can reveal.
The Social Market Foundation (SMF) is drawing up the plans, which would allow parents to borrow money from government at a low interest rate to enable them to pay childcare providers, similar to the concept of student loans.
The loans would then be paid back on a monthly basis directly from parents' salaries once their earnings move above a certain threshold.
Money failed to be recouped over a set period could be written off by government.
The SMF believes that many daycare providers are struggling to offer financially viable services because revenue from parents and that gained via local authorities to deliver the existing free provision is often too low.
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