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Session 2002-03 1 July 2003


House of Commons

Work and Pensions Committee

7 Millbank, London SW1P 3JA

€“ Childcare for Working Parents €“

The Work and Pensions Select Committee today publishes its Report into Childcare for Working Parents. The Report concludes that in spite of increased resources for childcare provided through the National Childcare Strategy and the 2002 Spending Review there will not be sufficient childcare places for parents in order to enable them to work. The childcare budget will also fail to provide sufficient places to meet the child poverty and lone parent employment targets. The Report urges the Government to provide more funding to expand the roll-out of Children€™s Centres beyond the 20% most deprived wards.

The Report raises a number of specific concerns regarding childcare expansion and funding. Most of the current and planned childcare initiatives are targetted on the 20% most deprived wards. But the Committee is extremely concerned that low income parents in rural areas and in pockets of deprivation in towns and cities outside the 20% most deprived wards are not benefitting sufficiently from expanded childcare provision. The funding arrangements for childcare providers could be characterised as a funding jigsaw which lacks coherence. These problems are compounded by a lack of funding sustainability. The Report welcomes the creation of the new Childcare, Early Years and Sure Start Unit and urges the Unit to lead the way in instigating a joined-up approach to childcare funding.

The Committee considers that Childcare Tax Credit (CCTC) plays an important role in providing funding direct to parents which enables them to take up paid work, yet CCTC poses a range of complex and interlocking problems. The Report recommends that the Government considers reducing the hours a second earner in a couple needs to work to qualify for CCTC, reducing the qualifying hours for Working Tax Credit, increasing the percentage of childcare costs covered; and raising the maximum which can be claimed by families with two or more children. We also recommend that further action be taken to deal with the regional variations in childcare costs.

The Chairman of the Committee, Sir Archy Kirkwood MP, said: €œWe acknowledge the huge leap forward made in childcare provision in recent years and welcome the Government€™s commitment to further childcare expansion, as demonstrated by the 2002 Spending Review. But we hope that further improvements can be made by rolling out Children€™s Centres beyond the 20% most deprived wards. This would have a significant impact on the lives of poor children and their families.€

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