Save the Children’s comment on the government response to the Work and Pensions Committee’s report on childcare in Universal Credit

Save the Children, 2nd July 

We welcome the government’s engagement with this important issue and are pleased to see the positive steps they are taking to promote the childcare offer. However, to stop upfront costs spiralling out of control, the government must take urgent action. When Universal Credit is rolled out, half a million families will be using this system.

Families eligible for childcare support under Universal Credit tell us that upfront costs are the biggest issue they face. To pay these prohibitive costs upfront, parents are being forced into debt, struggling to pay bills and in some cases having to drop out of work altogether – and this isn’t just a problem with the first month, parents struggle on a regular basis to pay these bills, ending up in a cycle of debt and repayment.

There are a number of different ways in which the system could be altered to allow costs to be paid upfront. Paying upfront to providers is one option, which would help respect the other fundamental principle of Universal Credit: making work pay. The government could also look at a system where parents are paid in advance, on the basis of an agreed invoice with providers.