£1bn childcare investment to deliver much needed help for parents in East Dunbartonshire – Jo

Families in East Dunbartonshire are to get greater financial support for childcare thanks to a major new initiative.

Liberal Democrat analysis shows that the £1bn boost to help parents with childcare costs could benefit around 4160 families in East Dunbartonshire.

Local MP Jo Swinson has today welcomed the plans, which were announced by Deputy Prime Minister, Nick Clegg, as “much needed help” for working families.

The Coalition Government’s scheme will save the typical working family with two children up to £2,400 a year.

Commenting Jo said:

“Everyone knows that the cost of childcare is a big worry for many families. Almost a quarter of employed mothers say they would like to work longer hours but can’t do so because of the cost of childcare.

“Making sure all families, and mothers in particular, can afford to work is important to help build a stronger economy as well as deliver a fairer society. This has been an absolute priority for Nick Clegg and the Liberal Democrats and I am delighted we are able to give parents this much needed help.”

Deputy Prime Minister and Leader of the Liberal Democrats, Nick Clegg said:

“The rising cost of childcare is one of the biggest challenges parents face and it means many mums and dads simply can’t afford to work. This not only hurts them financially, but is bad for the economy too.

“The announcement of a £1bn investment in childcare will make sure it pays to work.

“An extra £1,200 for each child will make a real difference to families in East Dunbartonshire and families across the country just like them, who find themselves constantly worrying about how to juggle the family budget.

“Extending support for working families on Universal Credit will also make sure it is worth working extra hours even if you’re on low wages.”

More Details:

  • It will be phased in from autumn 2015 and will ultimately be open to around 2.5 million families with children under 12. From the first year of operation, all children under five will be eligible, initially opening the scheme to 1.3 million families, and the scheme will build up over time to include children under 12.
  • To be eligible, families will have all parents in work, with each earning less than £150,000 a year, and will not already receive support through tax credits and later, Universal Credit. They will receive 20% – equivalent to the basic rate of tax – of their yearly childcare costs up to £6,000 per child.
  • The new tax-free childcare scheme will massively extend support compared to the current system of Employer Supported Childcare (ESC). ESC will continue for current members if they want to stay in it, but new claimants will get support through the new tax-free offer. ESC will also continue to be open to new joiners until the tax-free childcare scheme is available.  Eligible ESC recipients may choose to move into the new tax-free childcare scheme if they wish, but will not be able to receive both.
  • For a family with two children, the new offer will be worth more than double the amount of a single claim for ESC, and will be open to around five times as many families.
  • For parents who currently receive childcare support through tax credits and in due course Universal Credit, the Government will increase childcare support to improve work incentives and ensure that it is worthwhile to work up to full-time hours for low and middle income parents. An additional £200m of support will be provided within Universal Credit, which is equivalent to covering 85% of childcare costs for households qualifying for the Universal Credit childcare element where the lone parent or both earners in a couple pay income tax. The details of how to provide this support will be determined as part of the consultation on the scheme for parents not in receipt of Universal Credit, to ensure the two schemes operate effectively together.
  • The new tax-free offer will be phased in from autumn 2015, partly funded by the phasing out of ESC. The £200m Universal Credit offer is planned to be phased in from April 2016 as childcare support moves from tax credits into Universal Credit and will be funded from within social security budgets at the time. Details will be set out in future spending reviews.
  • The Government will shortly consult on the detail of the new tax-free childcare scheme, including on how employers could continue to play a role in supporting their employees with childcare costs within the new system.

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