Childcare funding must reflect true costs, says Busy Bees Benefits
Gabriella Jozwiak
Thursday, June 13, 2013
The government needs to increase the amount it will offer to parents towards childcare costs because its calculations are out of date, childcare voucher provider Busy Bees Benefits has warned.
Under the government's Tax-Free Childcare Scheme families can claim back 20 per cent of childcare bills up to a maximum of £6,000 a year for each child from 2015.
But Busy Bees Benefits has warned that the average annual cost of childcare per child is about £7,500 and would be even higher by the time the scheme begins, and has launched a campaign calling for the limit to be raised in response.
John Woodward, managing director of the firm, said: "We want to ensure the Tax-Free Childcare Scheme is fit for purpose from the outset and that the scheme does not suffer the same fate as the childcare voucher scheme, where the value of the support has been eroded over time as it has not kept pace with the true cost of childcare."
Woodward said he wants the government to increase the limit in line with childcare costs before the scheme's launch, and commit to reviewing and raising the cap each year to keep the maximum childcare cost in line with average childcare bills.
He suggested that as childcare prices rise in line with staff costs, the cap could be linked to increases to minimum wage.
United for All Ages and the Good Care Guide director Denise Burke agreed that the timescale for the scheme would mean financial support on offer would be “too little too late for many families”.
“Autumn 2015 is a long way off,” said Burke. “Childcare costs are continuing to rise, therefore, the £6,000 cap will be of little help in two years time.”
She backed Busy Bees’ Mind the Gap – Raise the Cap campaign, but said even with a raised upper limit of support, the scheme would not solve the “issue of affordability in childcare”.
“The government must think long and hard about what real support it can provide to help parents with the cost of childcare,” said Burke.
“It simply can't risk another useless idea like ratio changes which has finally been kicked into the long grass.”
As part of the campaign, Busy Bees has launched a government e-petition, which has collected more than 500 signatures so far.
The Treasury announced the Tax-Free Childcare Scheme in March. It will be available for parents on annual salaries of £150,000 or less, up to a maximum of £1,200 a year for each child aged 12 or younger.
