What staff need to know about the new government childcare scheme

The government is launching two childcare schemes to increase financial assistance for working families

Despite a new government scheme – a double roll-out promising savings of £2,000 per year for tax-free childcare and £5,000 per year for 30 hours’ free childcare – the struggle for working families to afford childcare looks set to continue.

The first roll-out on 28 April this year offers tax-free childcare, while the second roll-out in September this year provides 30 hours’ free childcare; however, there appears to be a discrepancy between the stated government savings and the reality faced by working families.

What the government is offering

1] Tax-free childcare

The government will pay 20p of every £1 spent on childcare, with funding offered for OFSTED-registered organisations and nannies registered for the programme. The projected savings for this programme are up to £2,000 per year per child (£4,000 for disabled children).

Both parents must be employed, including self-employed. Their earnings must not exceed £100,000 per annum and must not fall below £115 per week.

Initially, only families with children under the age of two will be eligible; by the end of this year, it is expected all other eligible families can apply. Working parents must check whether registering for the scheme will affect their existing tax credit payments. Parents can revert to tax credits if they wish and they can register for updates at childcarechoices.gov.uk.

2] 30 hours’ free childcare

Working families with children aged three to four years of age are eligible for 30 hours’ free childcare per week, across England only. A pilot scheme has been announced for Wales. Both parents must be working, earning a minimum of £111-£115 per week and no more than £100,000 per year.

30 hours’ free childcare can be divided across a maximum of two providers. All other children will continue to receive 15 state-subsidised hours per week. Pre-registration is available at childcarechoices.gov.uk.
At present, there is no listing of childcare providers offering free hours.

What experts say

Experts are sceptical about the difference government-projected savings will make to working families due to a combination of inflation and lack of child care providers offering free hours. A representative of the Professional Association for Childcare and Early Years says government assistance does not meet the cost of proper child care; in addition, it is expected that child care providers and nannies will raise their fees for children outside the specified age limits.

Ellen Broomé, the Family and Childcare Trust deputy chief executive, warns that the government must ensure all children have access to adequate childcare.

What parents say

Sally, a single parent from Surrey, cannot find a 30-hour placement for her two-year-old son. The nursery attached to her daughter’s primary school cannot afford a free-hours placement unless Sally pays £20 top-up per day.

Sally cannot find a childcare provider who offers free hours without charging a top-up, nor can she find a childminder who can afford to provide childcare for £4.16 per hour.

The Family and Childcare Trust states that childcare fees for a part-time placement are over £6,000 per annum on average, and over £8,000 in London. Nannies are paid more than double these figures.

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