Last week the Work and Pensions Committee made the bold move of calling out the Government for their lack of action on improving the childcare offer under Universal Credit. This doesn’t sound like a particularly big deal, but the move is actually pretty unprecedented – in fact, Chair of the Committee Frank Field has said the ‘response from ministers has been appalling’.
So, why such a strong response? And what are the problems with childcare?
Many of us will have heard about the challenges some families across the UK are facing with Universal Credit. But not many people are talking about the childcare element of Universal Credit, yet. This is because only around 5 per cent of parents who will eventually receive childcare under Universal Credit are getting it now. But by the time the system is fully rolled out, half a million families will be getting childcare support through this system.
For those getting childcare through Universal Credit now, the system is complex, remains too expensive and parents find it a monthly challenge to cover their childcare bills (of potentially £1,000 for a full-time place).
That’s why we support the Committee’s calls for changes to the system, so that more families don’t find themselves facing these same challenges in the future.
Last October, Save the Children supported four amazing mums – Lucy, Vikki, Gaynor and Thuto – to give evidence to the Committee about their experiences of childcare and Universal Credit. Each of them spoke of the nightmare of the system, the stress and anxiety it has caused them, and the lengths they have had to go to simply to be able to cover their childcare and hold down their jobs.
“How is anyone supposed to find the money to pay for childcare in advance? It’s very, very stressful. I owe my mum and dad thousands, if it wasn’t for them I would have to give up work and I’d be living off food banks.” Gaynor, a parent to an 8-year-old son and 3-year-old twins, from Manchester.
Once the Committee had taken their evidence, they reported that ‘far from helping parents get into or back into work after having a child, the way the “support” is constructed under UC actually acts as a barrier to work’. They supported all our recommendations for Government on how childcare should work under Universal Credit, which are:
- Make childcare free for the poorest families under Universal Credit
Increasing support from covering 85% to 100% of childcare costs would have a big impact on parents’ take-home pay and help working mums return to work or increase their hours
- Provide childcare support upfront
The way the childcare element is paid to parents through Universal Credit means that parents are required to cover the costs themselves and are reimbursed weeks later. This leaves many parents facing a choice between taking on debt to pay for childcare or staying out of work altogether.
- Simplify childcare support
Parents have told us that the information they get is often confusing and patchy. Families need clear, tailored advice that will help them access the right childcare support.
On the day the parents gave evidence to the Committee, the (then) Secretary of State met with them to discuss the issue. And the current Secretary of State has shown real understanding of the challenges of the childcare system, particularly faced by single mothers on low incomes, who are struggling manage childcare bills and work.
But we are yet to see any significant improvements to the way families on the lowest incomes are supported with childcare. Without change, we will fail to see the transformative impact childcare can have on family life.
The Committee are right to have given the Government a timely reminder that, without any change, childcare and Universal Credit will continue to creep up the headlines as more families feel the pinch.