“We want to be able to go to work and to provide for our own families. But at the minute it seems as if there’s a roadblock everywhere we turn.” This is the voice of Vikki, one of a group of four mums struggling with childcare who told their stories to MPs last week as part of Parliament’s inquiry into childcare support through Universal Credit.
They talked about having to rely on friends and family for loans to cover childcare costs; being faced with upfront childcare bills of £1,300 to be able to go back to work; and being fined by their nurseries when they were unable to pay. One mother, Thuto, had had to turn down a job offer as taking it up would have left her with just £2 a day to live on after paying for childcare costs – despite desperately wanting to return to the workplace.
Childcare is a crucial source of support for families on low incomes
Access to affordable childcare enables parents to return to and stay in work, raising family incomes and giving parents more opportunities to enrich their children’s lives with toys, books and experiences. And high-quality childcare is a key way in which young children can be supported to learn and develop in their early years and beyond.
Universal Credit is a central way in which parents on low incomes are helped with childcare costs – but the way it’s set up at the moment isn’t working for families. It requires parents to pay costs upfront before waiting up to a month to be reimbursed, which, as MPs heard last week, means parents are being hit with bills of £1,000 or more to allow them to go back to work. These are costs that they simply can’t afford.
In addition, the support available often doesn’t go far enough. While up to 85% of costs are covered, this can still mean that parents might have to find £100 or more every month to pay the difference. This, plus the other costs they face, means they often find they aren’t much better off when working – exactly the opposite of what Universal Credit is meant to achieve.
Struggling with the cost of childcare
Hearing the voices of mothers struggling with childcare costs is an important step in the debate around Universal Credit. Until now, this fundamental flaw in the system hasn’t been widely spoken about, as other issues with the benefit have taken centre stage. But as more and more families with children are moved on to Universal Credit, this problem is starting to bite – and it becomes ever more urgent for the government to act.
This week’s Budget contained some welcome plans to improve Universal Credit. In particular, the government announced an increase to the work allowances by £1,000 per year, which will mean that working families will keep more of what they earn and be better off.
However, this is only a small step, and doesn’t address the crucial issues that parents with young children face when they want to return to the workplace. Childcare is still a major obstacle to parents being able to work and increase their incomes, and will remain so unless action is taken.
The steps we need to take
There are three urgent steps which need to be taken. The problem of upfront costs must be addressed to stop parents being forced into debt if they want to work. The amount of support available should be increased, to ensure that parents are better off when they do work. And the information about the system should be improved, so that parents don’t miss out on what they’re entitled to.
The government has heard the voices of those who are being failed by the system. Now is the time to act and ensure that Universal Credit can achieve its goal: to lift families out of poverty and ensure that work always pays.