The Work and Pensions Committee has today
launched an inquiry
into Universal Credit and childcare costs amid concerns that the
current system of childcare support creates barriers to parents
moving into work or working more hours.
The inquiry will examine how childcare support is paid and the
impact of caps and limits on the amount of support available. It
will also explore the effectiveness of advice about childcare
support given to parents claiming UC and the efficiency of public
funding of wider childcare support schemes.
The previous Committee concluded in a report in 2019 that
getting childcare support right was critical to the success of UC
but warned that flaws in the way that support was paid was
preventing some people moving into work or taking on more hours.
Despite the Government’s
commitment to change, the current Committee heard during its inquiry on
DWP’s response to the coronavirus outbreak that some of the
issues identified in the report were still having an impact.
Rt Hon MP, Chair of the Work and
Pensions Committee, said:
“Despite the intention that Universal Credit should act as a
springboard for helping more people benefit from work, there have
been concerns for some time now that the way support is provided
to families to meet childcare costs is acting in direct conflict
with that aim.
The Committee has heard during the pandemic from parents
struggling with upfront childcare costs and the cap on
reimbursement of 85%. This inquiry will explore whether support
is being paid at the right time and whether there is a case for
changing the cap.
With the recent removal of the £20 a week UC uplift, many
parents and carers may be looking to work more hours to
compensate. It is therefore more important than ever that we have
childcare support that works properly for them.”
Terms of Reference
The Committee would like to hear views on the
following questions. You don’t have to answer all of
the questions. You can respond on behalf of an organisation, or
as an individual.
The deadline for submissions is Thursday 13 January 2022.
How childcare support is paid
- What is the impact of having to pay for childcare upfront
under Universal Credit on parents’
decisions to work, or to work more hours?
- How effective is the support that DWP offers with upfront
costs (for example, through the
Flexible Support Fund)? How could it be improved?
Caps and limits on support
- What is the impact on claimants of the monthly maximum
reimbursement cap on childcare costs
in Universal Credit, and the 85% cap? Is there a case for
changing either of them?
- If so, what do we know about the likely costs and effects?
- What effect do the existing caps have on childcare providers
and the availability of childcare?
- What has been the impact of not uprating the maximum amount
payable since 2005?
- What impact do deductions from benefit payments have on the
amount of childcare support
that people actually receive? Are there any changes DWP could
make to the way it manages
deductions?
Advice on childcare support
- 6. In 2019, the Department said it would work with other
departments to improve communication
with, and information provided to, claimants about childcare
support. How effective have these
changes been? What further changes could DWP make?
Wider childcare support schemes
- Does the Government’s current approach to funding childcare
support represent good value for
money?
