12 JANUARY 2015

Today, over half of all families with children in the UK – over four million – use and pay for formal childcare every year. Governments of all stripes have recognised how important childcare is – for children’s development; for parents – especially mothers – to go back to work; and for our economy to thrive. The UK now spends £6 billion supporting childcare every year.

Despite this welcome commitment from successive governments, childcare remains hugely expensive. In fact, the Family and Childcare Trust’s 2014 annual childcare survey showed that even part-time childcare costs for two children now outstrip the average mortgage.

So when the government introduced the Childcare Payments Act – or to use its more common name, tax free childcare – and its intention to increase the support that families can get for childcare costs – this was very welcome news.

But for many families childcare will unfortunately remain inaccessible. Our current childcare support system – or systems – is incredibly confusing, complex and difficult for parents to navigate. And from 2016 there will be four separate childcare support systems: tax credits, Universal Credit, employer-supported vouchers and the new tax free voucher.

Many families will not know which system will give them the best support. If they opt for the wrong scheme, families could lose vital financial support, and the onus will be on them to know when to switch schemes.

The Government estimated that 50,000 such families may be affected, but their figures did not take into account the growing numbers of people who are self-employed and on zero hours contracts. We think this is a large underestimate.

According to our calculations some 335,000 families could miss out on the vital financial help they need to pay for childcare and stay in work, because of the complexity of the new childcare support system. The families who will be most affected are the increasing number whose wages fluctuate, such as the self-employed, temporary workers, those who rely on commission and people on zero hours contracts – hard-working families who want to get on.

This represents a real barrier to work and undermines the Government’s aim of making work pay and to get more women into work. To make sure families get the support they need, parents need to be able to switch between the different support systems more easily as their circumstances change, and better information to help them navigate the confusing landscape of childcare support.

But those are short term solutions. Our research reinforces the need for a complete overhaul of the childcare system. In the run up to the general election, we need all political parties to commit to introducing a simple support system that is responsive to families’ needs and recognises the reality of modern day working patterns.

Read the full report here.

ELLEN BROOME, Director of Policy, Communication and Research at Family and Childcare Trust, ABOUT AUTHOR

Director of Policy, Communication and Research at Family and Childcare Trust, @ellenbroome, www.familyandchildcaretrust.org