On the face of it, the Government’s Budget announcement extending the tax break on childcare costs should be very good news for families.
But the news will only help some wealthier families after the election and it won’t address the shortage of childcare places for one and two year olds. This extra public spending could have been targeted to support those who need help with childcare most.
The announcement has three major flaws:
- it targets help with childcare costs on wealthier families who can afford to pay up to £10,000 a year for a childcare place – to get a £2000 tax break, you have to be able to spend £10,000 on childcare; these wealthier families will now get an even bigger tax break while ordinary families are struggling with childcare costs;
- parents, particularly on lower incomes, need help now and can’t afford to wait until after the general election for help to arrive; why hasn’t the government brought forward help for all parents?
- with the new baby boom, there is a big shortage in childcare places, particularly for parents entitled to a free place for two year olds; the tax break announced today won’t create new childcare places for one and two year olds
The good news is that childcare will now be at the centre of the election battleground in 2015. All parties need to do much more to make childcare affordable so children get a good start in life and parents can work, thereby boosting our economy and our society. 18 March 2014