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Last week Daycare Trust and Save the Children launched the findings of a huge survey of 4,000 parents that we had carried out over the summer and which uncovered the true cost of childcare to families – which impacts everything from their careers to how much parents spend on their weekly food shop

UK families already spend around a third of their net income on childcare – more than in any other developed country in the world. Last year, childcare costs rose by almost twice as much as the average wage increased. It therefore comes as little surprise that two thirds of families we surveyed, regardless of income, are finding themselves caught in a childcare trap.

They can’t afford not to work but struggle to pay for the childcare they need in order to hold down a job, and so often find themselves to be no better off than if they lived on benefits. Of those parents in severe poverty and currently in paid employment, 80% agreed with the statement “Once I have paid for childcare, I am in a similar position to as if I was not working”.  

A quarter of parents, regardless of income, said that the cost of childcare had caused them to get into debt.  Again, this comes as no surprise, given that childcare costs are also one of the main outgoings that families face. 41% of respondents told us that their childcare costs are on a par with mortgage or rent payments.

One of the key reasons we carried this research was to support our lobbying in relation to the new Universal Credit in the Welfare Reform Bill. The government has spoken extensively about its commitment to ‘making work pay’. We are calling on the government to make good on this pledge, by offering a level of childcare support in the new Universal Credit which will actually make it financially worthwhile for parents to work.  We want the government to fund 80 per cent of childcare costs up to current weekly limits for all eligible parents, including those working fewer than 16 hours per week. This will cost around £600m, but we believe it is essential to make work pay and lift families out of poverty – two key government objectives.

For compelling evidence of the difference that this funding could make, we need look no further than the impact that the recent cut in childcare support has had.  From April, the maximum amount of childcare costs covered by the tax credit system was reduced from 80 per cent to 70 per cent. As a result, many families with two or more children are losing an average of £546 per year. Four in ten of those parents affected by this change in our survey told us that that they are considering giving up work because they will no longer earn enough to cover their childcare bill.  

We believe that the social and economic case for investing in childcare is overwhelming. By increasing government help with childcare costs, we can lift children out of poverty and ensure they get the best start in life – while at the same time, enabling parents to work to support their family. If the government really is committed to making work pay, tackling the cost of childcare must be at the heart of their solution.


 



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Written by Anand Shukla   
Wednesday, 14 September 2011 10:03
Last Updated on Wednesday, 14 September 2011 10:07
 

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