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Tuesday, July 07, 2015

Have the Tories backtracked on Nick Clegg's flagship tax-free childcare scheme?

I was having a discussion on Saturday with a constituent who was finding the cost of childcare to be crippling.  Both he and his wife worked but despite accessing the Government's voucher scheme they were finding it increasingly difficult to pay

It was because of people facing these sorts of pressures that Nick Clegg made it his mission, whilst in government, to improve support for child care. As this Guardian article makes clear he came up with a scheme to replace the existing childcare vouchers whilst at the same time offering a larger tax saving:

From autumn 2015 parents will be able to buy vouchers online to pay for childcare. For every 80p they spend, the government will add 20p. The scheme is available for up to £10,000 of childcare costs per child each year but there is no limit on how many children you can claim for.

In the case of a parent claiming the full £10,000, he or she will pay £8,000, while the government will give a £2,000 subsidy (previously the cap was £6,000, meaning a £1,200 tax subsidy). The vouchers, which will be held in an online account run by National Savings; Investments, can only be used to pay for Ofsted-regulated childcare, not for care provided by friends or relatives.

The scheme will work in quarterly entitlement periods – once eligible, parents will continue to be entitled to support for three months, regardless of any changes in circumstances. They can pay in a lump sum of £2,000 each quarter and get £500 from the government in one sum, or make monthly payments.

One parent will need to make the claim, but if they are part of a couple they will need to give details of their partner's income.

This government website confirms that the scheme was due to start in the autumn of this year.

However, it seems that since the General Election new Tory Ministers have started to backtrack on this commitment and have done so by the back door rather than through any public announcement.

The latest version of that government website now says that Tax-Free Childcare will be launched from early 2017. That is a slippage of about 16 or 17 months, possibly longer. Because there has been no announcement we do not know the reasons for this delay nor have we been able to scrutinise it. In fact if I had not been carrying out some research to help my constituent I would have been none the wiser either.

It seems that under a Tory majority government working parents are to be abandoned to their own devices, without the additional help and assistance with childcare that Nick Clegg had secured for them.
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