Tuesday, 19 March 2013

New Funding To Make Childcare More Affordable Welcomed By Busy Bees

The long-awaited announcement by government of new arrangements to help working parents pay for childcare is great news.  Busy Bees welcomes the principle of this proposal as it will help to make childcare more affordable for working parents and will be a simple system.  Government has recognised the financial struggle that parents face and is helping to support them.

The scheme will eventually replace Childcare Vouchers, available since 1998. Whilst Childcare Vouchers save parents up to £933 a year, they rely on employers to provide a scheme as an employee benefit, leading to the support for parents being very patchy. They are also not available to those who are self-employed or those on minimum wage (as the law does not allow amounts to be sacrificed which would take their pay level below the minimum wage threshold). The new scheme will offer help to households where both parents work and single working parents.  It is estimated the new scheme will benefit around 2.5 million working parents which in turn will help employers wanting to recruit and retain skilled staff.

Under the new scheme, the government will subsidise 20% of childcare fees up to £6,000 per year for each child. So, in effect, for every £100 paid for childcare the parents pay £80 and the government adds £20.  Parents will therefore be able to get government contributions of up to £1,200 per child, per year. Initially it will be available for children up to the age of 5 and will eventually include children up to the age of 12.

John Woodward, MD of Busy Bees group said:

“We welcome the government’s proposals to provide financial support to working parents to help them pay for quality childcare. As the UK’s largest childcare provider and operator of the existing Childcare Voucher scheme, Busy Bees understands the financial pressure parents face when paying for childcare, particularly for early years care.

Whilst the Childcare Voucher scheme is a popular and effective way to support working parents, it is clear that rising costs and the increased demand for childcare to allow parents to return to work means that change is necessary. Busy Bees recognised the squeeze on ordinary working families and has been campaigning for the last year for the savings to be increased, working on behalf of parents who have struggled to meet 2012/13 costs with 2006 allowances. Busy Bees is well placed to offer the new voucher and will make the scheme as easy as possible for parents and childcare providers.”

The Childcare Voucher scheme guarantees that the funds are spent on registered childcare, avoiding fraudulent activity and providing peace of mind for parents.  This new funding scheme will continue to guarantee this and will continue to provide the safeguards parents enjoyed when using Childcare Vouchers.

Until the new scheme is in place, Childcare Vouchers will continue to be available and parents are urged to approach their employer asking them to offer a scheme if they do not already have one as the savings for parents and employers are significant.  Even when the new scheme is in place, there will be a period of 5 years when parents can still join the Childcare Voucher scheme if this is to their advantage.

The new scheme is expected to launch in Autumn 2015 and Busy Bees will be contributing to the consultation in the period which follows the announcement.  

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