Treasury pays out £1m manually after childcare IT failings

5 Feb 18

The Treasury has had to pay out almost £1m manually to parents following failures with the system set up to administer the Tax-Free Childcare scheme.

The issue was disclosed in a written response to a parliamentary question raised by Rushanara Ali, Labour MP for Bethnal Green and Bow.

In her answer to Ali, chief secretary to the Treasury Liz Truss revealed that a total of £966,666 was given to parents who did not receive their automated payment, and a further £38,949 was paid for inconvenience and expenses.

Truss also confirmed that technical difficulties with HMRC’s website led to them receiving 3,496 complaints from parents who had applied for payments.

Truss told the Treasury select committee on 31 January that HMRC has been struggling to align itself with computer company Atos and NS&I, which are also involved in the delivery of the childcare payments.

She said: “Fundamentally it comes down to the design of the system,” before adding: “I was not confident about rolling out to a further group of parents until issues have been dealt with.”

An ongoing Treasury committee probe is reviewing childcare policy and its influence on the economy.

The Tax-Free Childcare scheme provides parents with up to £2,000 per child per year towards childcare costs. For every £8 a parent puts towards childcare, the government will pay an extra £2.

An HMRC spokesperson said: “More than 340,000 parents have successfully opened a childcare account, and are benefiting from new forms of government childcare support, which will cut thousands of pounds off bills for millions of households, supporting parents to return to or remain in work.”


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