By Richard Dunstan, Workflex blog editor
In January, a Working Families research report – Off Balance – highlighted the enormous challenge that many parents of disabled children face in trying to balance their especially demanding care responsibilities with paid work, not least due to the often very high cost (and inadequate supply) of suitable childcare. And last month, with a rare lack of ministerial fanfare, the government quietly revealed a small but potentially significant boost for such parents, in terms of financial support for childcare costs.
In its response to a technical consultation on draft secondary legislation establishing the Treasury’s tax-free childcare scheme, due to come into force later this year, under which the government will top-up by 20 pence every 80 pence paid into a ‘childcare account’ by eligible parents, up to a maximum of £2,000, HM Revenue & Customs stated:
“Representations were made during consultation that additional support should be provided for disabled children in view of the generally higher childcare costs their parents can face. Similar comments were also made during the Bill’s Commons Committee stage, when the [Minister] made a commitment to consider this matter further.
Having considered this, the Government has decided to introduce legislation to increase the maximum amount that parents of disabled children can pay into their childcare accounts, in recognition of the higher childcare costs these families incur. For accounts for disabled children, the maximum payment for a standard three month entitlement period will be doubled [from £2,000] to £4,000. This means that a parent with a disabled child will be able to pay up to £16,000 into their childcare account per year and receive top-up payments of up to £4,000.”
It’s fair to say that the proposed tax-free childcare scheme is not universally loved by childcare campaigners, and leading critics were quick to note that only those parents of disabled children that can afford to pay more than the previous upper limit of £8,000 per year into a tax-free childcare account would actually receive any extra financial support from government as a result of the move. Neil Leitch, chief executive of the Pre-School Learning Alliance, said:
“The tax-free childcare scheme is already regressive in nature, as the more a family can afford to pay into their childcare account, the more financial support they receive from government. It would have been far more practical for the government to increase the rate of top-up for parents of disabled children above the current rate of 20 per cent. That would have ensured that all eligible families benefit from additional support, not just those that can afford to spend large amounts on childcare.”
Working Families agrees, and in any case it’s far from clear whether implementation of the tax-free childcare scheme would survive a change of government in May, as both the Labour Party and the Liberal Democrats have set out quite specific plans for significant childcare reform that make no mention of the scheme.
However, the move is potentially of wider significance, in that it is the first time any government has explicitly recognised and made provision for, in legislation, the higher childcare costs faced by parents of disabled children. (That is, other than the disability element of child tax credit, and the disabled child addition in Universal Credit, though neither are aimed specifically at higher childcare costs). Prior to this (low-key) announcement, campaign groups such as Contact a Family, the Family & Childcare Trust, Every Disabled Child Matters, and Working Families had struggled to get government officials even to discuss the issue. But last year’s Parliamentary Inquiry into Childcare for Disabled Children, which was supported by all four groups, may well have been the catalyst for the evident policy breakthrough.
The challenge now is to build on this welcome recognition of the issue by current Treasury ministers, and work towards the inclusion of specific policy commitments in the policy plans of all political parties. In the words of Amanda Batten, chief executive of Contact a Family, “ahead of the general election, all political parties must commit to tackling the lack of affordable, quality childcare for disabled children once and for all”.
Labour’s shadow childcare minister, Alison McGovern, has expressed concern about the especially harsh childcare crunch faced by parents of disabled children in a number of recent speeches, as did her predecessor Lucy Powell, but that acknowledgement has yet to translate into a specific policy pledge. And the arguably more ambitious childcare proposals of the Liberal Democrats are similarly silent on the issue. It’s time for them to follow the Treasury’s lead.