Fancy £1 an hour childcare?

pound coin

£1 childcareBankers, businessmen, trade unions and economists don’t often agree on much, but representatives from all of these groups agree on one thing: mothers need more help with childcare.

A landmark report from the Commission on Living Standards (made up of the aforementioned bankers, trade union representatives and economists) warns that millions of low and middle income families will see no rise in living standards for 10 years – unless the government tackles low pay and childcare costs now.

It argues that Britain needs to help “the missing million” women back into the workforce by offering an extra 10 hours of childcare a week at the cost of just £1 an hour.

Sound good?

If the government were to put this recommendation into action, it would cost £2.2bn – but the extra freedom it would give mothers to return to work (and the added spending power it would give families) would help boost the economy, the report says.

At present parents of three and four-year-olds are entitled to 15 hours of free childcare a week.

The Commission on Living Standards recommends that these 15 hours of free childcare be increased to 25 hours – but parents would be charged £10 for the extra 10 hours.

Of course, there’s no guarantee that the government will act on the report’s recommendations. So what can you do in the meantime?

First make sure you are getting all the help with childcare costs that you are entitled to. Many parents aren’t aware that they can claim things like childcare tax credits and childcare vouchers, which can reduce childcare costs by up to 70% in some cases. But you don’t automatically get this help – it’s up to you to go and claim it.

See our article 3 ways to get help with childcare costs to make sure you’re not missing out on help with childcare payments or free nursery care.

It’s a good thing that politicians are finally starting to take the issue of childcare seriously – if only because they see it’s a hot button issue with voters! (A recent petition to ‘Help working parents meet childcare costs by raising the cap on childcare vouchers to £75 per week’ has already been signed by over 15,600 people).

What do you think of the report’s recommendation for extra help with childcare? Would you take advantage of an extra 10 hours if it cost just £1 an hour?

Case study: Mum of two Caroline, 36

“I think this is a great idea. At the moment I work for 16 hours a week now Isabelle has turned three and gets 15 hours of free childcare. I do pay extra for her to stay to a lunch club at the moment – to increase the time she is at preschool – and use grandparents for the rest of her childcare.

If they raise the amount of free or low-cost childcare to 25 hours, I could increase my hours at work. This would mean more income tax to the taxman (my current hours/pay means I am just under the income tax threshold).

Maybe they could also look at funding childcare from when kids are two years old instead of three, so mums could go back to work sooner.  Of course this is only possible if there are enough jobs out there for Mums to return to. It may also go a little way to making up for the unfair fiasco of the removal of child benefit to some middle income families.”