Report calls for action on childcare support under Universal Credit

The Government should review its response to a report detailing the problems parents face with Universal Credit when they are moving into work, according to the Department for Work and Pensions Select Committee.

In its report on Universal Credit and childcare in December the Committee called for the Government to divert funding from “schemes aimed at wealthier parents” (Tax Free Childcare and the 30 hours free childcare) towards Universal Credit childcare to help more people into work.

In addition it called for the Department to commit to providing, in consultation with other relevant Departments, an analysis of the Government’s spending on the 30 free hours free childcare by income, to show which households are benefiting from the policy as well as  an analysis on the impact of UC childcare cost caps.

Its follow-up report this week says the Government response has been disappointing. It states: “Witnesses—including parents, charities and support organisations—gave up their time to contribute to our inquiry. They deserve much better treatment than this.”

In addition to the issues around childcare policies and funding,  the report detailed the difficulties parents faced with childcare payments under Universal Credit (UC). In some cases, the report said, the difficulties were so severe that parents who wanted to work were being prevented from doing so.

In January, Amber Rudd, the Secretary of State for the DWP, announced “a fresh approach to Universal Credit”, recognising some of the structural and administrative challenges with Universal Credit. She said the Flexible Support Fund could be used to help with upfront childcare fees, but later stated that this was not a new policy. She also said the DMP should be flexible when parents were unable to report their childcare costs immediately. The select committee says there has been little detail on any new approach.

It says that, in addition to addressing the issues around funding between tax-free childcare, the 30 hours offering and Universal Credit, the Government should set out alternative means of addressing the problems it outlined, such as those associated with childcare payments not being paid direct to providers. It calls for details about the pilots the Government says it is running to trial a more flexible approach to the provision of receipts for childcare costs and on the use of the Flexible Support Fund.

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