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Daycare Trust welcomes doubling of childcare places but is concerned by tax credit freeze

Responding to the Chancellor’s announcement that free childcare places for two year-olds will be extended to cover 40 per cent of children compared to the planned 20 per cent, Anand Shukla, Chief Executive of Daycare Trust, said:

 "We warmly welcome today's announcement of the doubling of free childcare places for two year-olds. The introduction of, and ongoing commitment to, the free early years entitlement has been one the most important family-friendly policies in recent years and we are pleased to see the Government continue to build upon the very successful entitlement for all three and four year-olds.

“The evidence shows that attending nursery has long-lasting benefits for children, particularly those from disadvantaged backgrounds. Today’s announcement is an important step towards a universal entitlement for all two year olds. It is now incumbent on the Government to work with local authorities and childcare providers to ensure that high quality places are available and that parents are supported to access their entitlement.

“ However, we are very concerned about the long term impact on parents and children of the decision to freeze the couple and lone parent elements of the Working Tax Credit and the withdrawal of the promised above-inflation increase in the Child Tax Credit. At a time when family budgets are increasingly squeezed and childcare costs are rising, parents will now be forced to shoulder more of these costs themselves. This risks trapping families on benefits if they find that they are no longer better off in work.

“Today’s autumn statement focused on increasing investment to encourage growth, yet childcare provision is a key part of this country’s infrastructure and millions of working parents rely on it every day. It is only by supporting families through providing affordable and flexible childcare, as well as offering financial help through the tax credit system, that parents on low and middle income will be able to afford to stay in work. This is essential for economic recovery, as well as for alleviating child poverty.”

ENDS

NOTES TO EDITORS

Currently all three and four year old children are entitled to 15 hours of free early years education per week. In the Spending Review in 2010 it was announced that this would be extended to the 20 per cent most disadvantaged two year-olds (around 140,000 children) and would become a statutory entitlement in 2013. Today the government has announced an additional £380m a year by 2014-15 to extend the offer to cover an extra 130,000 children.

According to the Department for Education, today’s announcement is accompanied by additional funding over the next three years:

2012-13         £73m

2013-14         £203m

2014-15         £380m

This will bring the total investment in free places for disadvantaged two year olds over the spending review period to:

2011-12         £64m

2012-13         £296m

2013-14         £534m

2014-15         £760m

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