By Vivienne Russell | 30 June 2014
All families should be given government help towards their childcare costs in a bid to encourage more mothers back to work, according to recommendations from the Institute for Public Policy Research.
The think-tank argued that greater spending on childcare could save £750m a year by the end of the decade because of extra revenue and lower benefits.
Under the IPPR’s model, the state would pick up 30% of families’ childcare costs. For families on Universal Credit, this would rise to 90%.
Dalia Ben-Galim, IPPR associate director, said: ‘May parents, especially mothers, find it difficult to take up work because the cost of childcare is so high and the quality of provision is so patchy.
‘Reforming our childcare system would help many more families with the cost, improve the quality and allow families to decide how they want to balance work and care.’
She added that simply extending tax reliefs was unlikely to make childcare more affordable and urged all political parties to include ‘radical and transformative’ childcare policies in their manifestos.
Specifically, the report recommends extending 15 hours a week of free early education to all two-year-olds (currently, this is limited to the 40% most disadvantaged) and extending 15 hours a week of free early education for two- to four-year-olds to cover 48 weeks per year, up from 38 weeks.
Over time, the IPPR said funding for childcare and early education should be shifted from tax reliefs and credits into supply funding for providers, with price controls to ensure that fees are capped.
The plan could be paid for by scrapping the marriage tax allowance, capping tax-free pension lump sums and freezing child benefit for children over the age of five.
