The Education Committee today writes to the Chancellor of the
Exchequer urging him to consider key recommendations
from its report on
support for childcare and the early years.
The Committee’s letter [PDF attached] follows
a response from the
Department for Education to its report that was
published in July.
Education Committee Chair also
commented:
“With less than a month to go before the Autumn Statement, we
hope the Chancellor will continue the work he started in his
Spring Budget towards reviving and expanding the country’s
struggling childcare sector.
“Recognising childcare settings as the vital infrastructure
that they are, my Committee believes providers should be spared
the burden of having their wafer thin margins sent to the
Chancellor through business rates and VAT on their purchases.
Many childcare businesses feel that they are penalised by
regulations that require minimum amounts of space, as this lamps
them with a higher tax bill. Particularly as Government has
been clear in its ambitions for this sector to expand
substantially to support parents, it feels unjust that childcare
businesses might cross thresholds to pay higher rates of tax
purely in order to meet the demand that Government is
creating.”
“These sums would be small beer to the Treasury but a
gamechanger for the sector, which has the power to support great
numbers of talented parents back into the workforce and be an
asset to the wider economy, as well promoting early development
and identifying cases of special educational needs.
“The Treasury should also review its Tax-Free Childcare
policy, which is poorly understood and underutilised by parents
because of its complexity. Whilst there was a warm welcome for
the increased funding for funded hours, it was a major
disappointment to the sector that this crucial area of support
was overlooked in the Spring Budget. Common sense should lead
ministers towards improving the schemes for which the Government
has already committed billions but which haven’t come close to
reaching their full potential.”
ENDS
Further information
- The Committee received over 1,380 pieces of written evidence
during the Childcare inquiry. They can be accessed
here.
- Five oral evidence sessions were held with witnesses
including parents, carers, trade unions, charitable organisations
and the Children’s Minister. Transcripts can be
accessed here.
