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Notices and Press Releases

Daycare Trust : Response to Policy Exchange report

Daycare Trust welcomes the principle of a Parental Care Allowance, the keynote feature of Little Britons: financing childcare choice, published today by the Policy Exchange think-tank. But the national childcare charity is opposed to the proposal that the large some of money involved - at least £4 billion - would be raised by cuts in other vital services for children and families.

"Daycare Trust has for some time advocated a very similar policy, offering financial support to parents of under-twos. Our plans would also apply whether or not parents worked. The key difference is that our proposal would be paid for with new money," says Joint-Chief Executive Emma Knights. "The Policy Exchange proposals are to be paid for by scrapping the childcare element of Working Tax Credit, employer-supported childcare, the Sure Start maternity grant and other payments aimed at helping the poorest parents, and this would not be a price worth paying."

Of profound concern to the charity are hints in the report that in future the PCA could become the main source of pre-school funding, possibly replacing the current free nursery places for three- and four-year-olds.

"The free nursery places for three- and four-year-olds are a huge success, popular with parents and delivering real benefits for children. For the first time, the Early Years Entitlement is giving all children the right to something that wealthy families have long valued - a high-quality nursery education."

Daycare Trust is calling for parental leave to be extended to 12 months, with an additional year where parents are financially supported either with the cost of childcare or with an income top-up if they choose to stay at home.

"We think that this would reduce pressure on parents in the crucial first two years of a child's life, allowing them to retain their employment rights and return to work when they think the time is right. They would receive the money whether or not, and for however many hours, they chose to work. But we are calling for this as an addition to, not a replacement of, other forms of support for childcare, particularly those aimed at reducing child poverty."

Daycare Trust also believes strongly that public money should only be used to subsidise "formal" childcare where parents can be assured that quality and safety are monitored.

One of the main sources of funding for the Parental Care Allowance identified by Policy Exchange is the Childcare Element of Working Tax Credit. Daycare Trust is particularly concerned that scrapping this childcare element would hit poor parents of older children, and particularly lone parents.

"Parents' need for childcare sometimes actually increases as children get older, because more of them choose to work when children are at school. The childcare element is not the simplest benefit to claim, but it does provide targeted support which is especially helpful to lone parents, who are most likely to fall within the income threshold."

"The costs of out-of-school and holiday childcare are rising more steeply than those of any other form of childcare. The Policy Exchange proposals may have an ironic consequence; parents who stay at home in their children's early years may find that without this source of support they are trapped indefinitely on benefits, or forced to rely on inadequate childcare arrangements."